Sunday, January 11, 2009

How Bush Unwittingly Helped Bin Laden's Plan To Wreck U.S. Economy


"We are continuing this policy in bleeding America to the point of bankruptcy."
---Osama bin Laden, 2004 videotape statement.

"The past eight years of imperial overstretch, hubris and domestic and international abuse of power on the part of the Bush administration has left the U.S. materially weakened financially, economically, politically and morally. Even the most hard-nosed, Guantanamo Bay-indifferent potential foreign investor in the U.S. must recognize that its financial system has collapsed."

---Willem Buiter, London School of Economics, 2009.

Contrary to what George W. Bush would have us believe, Osama bin Laden does not hate America for its freedoms. Nor has bin Laden ever harbored ambitions of destroying America in a military confrontation.

No, actually, what bin Laden has long sought is to diminish America's standing in the world by wrecking our economy. Bin Laden believes this is possible because he saw first-hand how the Soviet Union met its demise.

As bin Laden said in a 2004 statement, "We, alongside the mujahedeen, bled Russia for 10 years until it went bankrupt and was forced to withdraw in defeat."

It's clear that the main goal of the 9/11 attacks was to provoke the U.S. into a costly war in Afghanistan that would drain our treasury and ultimately weaken the main lever of America's global power and influence: the U.S. dollar.

Unfortunately for America, after 9/11, Bush took bin Laden's bait. As bin Laden put it himself in 2004, Al-Qaeda found it "easy for us to provoke and bait this administration."

In fact, bin Laden succeeded beyond his wildest dreams in provoking America into not one, but two disastrous and ruinously expensive wars that have done untold damage to America's global standing, as well as our economic power.

Eight years after the 9/11 attacks, America's economy is in the worst shape it has been since the Great Depression. But the damage is actually far worse than that. As bad as things were in the 1930s, few people then seriously expected the dollar to collapse or for America to become a bankrupt nation. Now, such forecasts are increasingly common.

It's becoming frightening clear that the U.S. dollar is now teetering on the edge of a cliff. For all of the economic misery of 2008, the dollar managed to avoid a steep collapse in value. But it's increasingly likely that in 2009, the East Asian nations that hold trillions of dollars in U.S. debt will finally start off-loading their assets. And when they do, the dollar will crumble in value.

The destruction of the dollar's value will mean an end to America's reign as the world's sole superpower. Once upon a time, such a scenario was embraced only by an alarmist fringe of commentators who weren't taken seriously. But these days, more and more mainstream respectable observers now believe this will be America's fate in the near future. Even Warren Buffet, the wealthiest man on earth, has said the U.S. is at risk of becoming a "sharecropper’s society."

How Bush Took Bin Laden's Bait

During the Soviets' disastrous war in Afghanistan, bin Laden saw first-hand the devastating effects that imperial overstretch can have on a nation's economy. Clearly, that costly fiasco played a role in the ultimate demise of the Soviet Union.

The 9/11 attacks were meant to provoke the U.S. into a similarly costly and debilitating war. And in this, it succeeded beyond bin Laden's wildest dreams, as Bush proceeded to launch not one, but two disastrous wars. (That one of these wars was against the secular state of Iraq, headed by bin Laden's old nemesis, Saddam Hussein, was the icing on the cake).

The 9/11 attacks presented a series of challenges to George W. Bush. The challenges were clear: kill or capture bin Laden and destroy Al-Qaeda.

Eight years later, it's difficult to comprehend just how much Bush has utterly failed to meet this challenge. Bin Laden remains a free man. Al-Qaeda remains intact and is still as lethal as ever. And the Taliban are back and growing in strength.

On the other hand, America is a profoundly different nation than the one that existed before 9/11. We're now a country that is widely despised, feared and hated around the world. We're a vastly weaker nation, economically, than we were before 9/11. America's debts have mushroomed to fantastic levels that threaten the nation's economic security.

About the only thing future historians will remember about Bush's presidency is that he presided over the beginning of the end of the American empire. And it's clear that his bungled response to 9/11 was a key factor in America's ultimate demise as a superpower.

It's this last point that is especially noteworthy. Bin Laden realized early on that his ragtag group of Al-Qaeda fighters could never defeat the U.S. militarily. And horrific as they were, the 9/11 attacks by themselves were a mere pinprick on the overall American economy.

For bin Laden to succeed, he needed the unwitting cooperation of George W. Bush. And that's exactly what bin Laden got, with Bush's disastrous, bungling response to the 9/11 attacks.

Saturday, January 10, 2009

Bush's Last 10 Days, Part 1: Recipe For Fiscal Disaster


As the countdown to Bush as ex-"president" begins, it might be good to put into context why some Americans, even some U.S. historians, regard Il Doofus as the worst "president" of modern times.

The federal deficit for the current fiscal year is being projected at $1.2 trillion. That's more than the entire national debt was at the time Jimmy Carter left office in January 1981.

The Congressional Budget Office report lays much of the blame for this spike on lower tax revenues due to the recession, and on $400 billion spent to bail out Fannie Mae, Freddie Mac and various financial institutions amid the mortgage crisis. Bush policies did a great deal to contribute to all of the above, but that's another post. For now, let's stick to the budget.

The deficit for fiscal 2007-08 was about $455 billion, consistent in real dollars with what was being run annually during the Reagan and Bush I presidencies. It's not too shocking, until you consider that Bush II inherited what had been the largest surplus the federal government has ever run, some $230 billion in fiscal 1999-2000, from departing President Bill Clinton's administration.

The surplus decreased to $158 billion during fiscal 2000-01, which Bush presided over some of. Bush apologists have tried to make an end run out of this, saying that declining revenues due to a briefly sour economy were responsible. They've also pointed out that the Clinton surpluses occurred even though federal tax cuts were passed in 1997, an apparent argument for supply-side policies.

That's fair enough, up to a point. But by 2001-02, the federal government was in the red again, and that continued year after year until the aforementioned $455 billion deficit was reached. How did this happen?

Bush spent the first months of his presidency pushing tax bonanzas, mainly for his rich friends, through the Congress, along with scraps from the rich man's table for the rest of us, amounting to $300 per person. His economic plan basically rolled back the relatively modest Clinton tax increases on the wealthy, passed by the narrowest of margins in 1993.

Students of fiscal policy know that it's anything but simple, but a few policy effects during this administration seem clear. It didn't take long to turn surpluses into deficits, and arguments that this isn't related to tax policy are, at the very least, unconvincing.

Then, after 9-11, Bush the "decider" decided to take the country to war(s). The first one, in Afghanistan, seemed and still seems like a defensible action, despite the toll on the Afghan people. The second, the March 2003 invasion of Iraq, was in hindsight clearly elective. Aside from being an act of aggression, it turned out to be one of the most expensive mistakes a U.S. administration has ever made.

According to a July 2008 update, military operations alone in Iraq and Afghanistan have cost $872.6 billion. Some $661.1 billion of that was for ops in Iraq. Source: Congressional Research Service data.

Even conservatives need to put this into perspective. Would Winston Churchill have held fast to big tax cuts for the wealthy during an expensive war, and even have audaciously pushed for more such cuts?

George W. Bush did. And in so doing, the U.S. was set up, and knocked down like bowling pins, for the $1.2 trillion annual deficit we now face. Now tell me that, as a "president," this buffoon didn't suck great big green ones, with warts on them. His decisions were consistently the worst that could have been made, and yet he stubbornly continues to defend them. I don't think future generations will find his defense convincing.

Manifesto Joe is an underground writer living in Texas. Check out his blog at Manifesto Joe's Texas Blues.