Iraq and Global Warming

(Part 2)

-draft-
Iraq is not entirely responsible for the incoming debacle in the US economy, but the resources that is using could had helped in making the recession less painful. Another problem with the $5000 a minute that is using -read part 1 of this article- is that it is financed with debt, and the billions needed to cover that debt are bringing the value of the dollar to its lowest levels in recent memory.

Part of the difficulty is that instead of raising taxes to finance the war, Bush proposed tax cuts during his first term. This put more pressure on the already weak dollar and it distorted the perception of a conflict that to most of the American citizens should end right now.

The US government policy is this, let the future generation pay for this conflict -since they will have to assume the current debt- we don't have to worry where that money will come from, we will be out of the office soon. This particular thought is what makes this war illegitimate, Bush was reluctant since the beginning to make the war against Iraq a matter of national commitment. He knew that if he taxed people in order to finance the invasion of Iraq, the support would have fallen right after the military operations started. The intellectual elite -not just the liberal media- supported the war based on insufficient prove, while millions went to the streets to oppose a war that they knew was phony. With taxes on regular citizens more people would have criticized or at least read more about a war that they would have to pay. This could have threatened the "war on terror" that was being developed by the Bush administration.

You can see how important are the financial priorities and its consequences over any policy that a government wants to take. Popular unrest starts mainly when our pockets are affected; international negotiations are more effective after the global community acts blocking a country on financial terms. The U.R.S.S fell because it didn't have enough resources to keep up its socialist model; China is destroying every natural resource that it has -no matter what the outcome- in order to keep growing and with that making its people happy. Iraq before the invasion, was a country devastated by the oil for food program, it couldn't even armed itself to the levels before the first Gulf War. The examples are various at showing just how important are to any organization and individual the money factor.

Sudan -as I have explained before- will skip any international condemnation as long as it continues to provide oil to China, whom will not be pressured to act against its economic priorities as long as it provides cheap merchandise to the West. No single policy is made without the consideration of the financial impact that it will have over the ruling industries.

Many conspiracy theories base a lot of their analysis taking the economic benefits that certain people will get from doing something evil and hidden. Take for example the claims made against Silverstain -right after the Twin Towers felt on the infamous terrorist attacks of 9/11- suggesting that he was well aware of the attacks, and didn't act properly because his insurance will cover the billions of loses inflicted by the falling of the buildings. It was also claimed that the United States wanted to keep the price of oil low when it invaded Iraq, and wanted to give billions of dollars in reconstruction contracts to big US companies. The outcome was much more different, the beneficiaries were third world countries that hold their debts in dollars, big US contractors, big oil companies, but the really big winners, speculators.

Now that the US economy has fallen into recession, the priorities have changed for a majority of Americans. Iraq is no longer their main concern -keep in mind that they are not paying for it- it is their job stability and the future of the economy. According to The Economist about 92.000 jobs were lost this past March, bringing the unemployment rate to 5.1%. Global Warming could also be forgotten if in order to enact laws that protect the environment people will have to expend more money on heating, gas, or taxes.

This is why economic policies are a delicate subject that it is not easy to address. For that matter a lot of priorities are not developed with money that is available, they are rather done by creating debt that is intangible for the citizens. This being the case is what reshapes many of the current actions taken by the Fed and the US government. The first one is "bailing out" big investment banks that took reckless decisions putting billions on sub-prime mortgages that were a sure loss. The second is giving tax rebates to US citizens that -on a minor rate- also took a high risk in buying houses beyond their means.

Where this leaves the Iraq war?

The war in Iraq has three major impacts on the US economy:

1- It brought the price of oil to records high and there is nothing that the world can do to stop that. Venezuela is using the money needed to invest in oil fields to help Chavez hold into the presidency "forever". Iraq most of the time is extracting oil at levels before the invasion, Iran is consumed on political conflicts that distract the government from its job, Russia is nationalizing its oil fields kicking out foreign companies that have the technology to improve oil exploration, Sudan is sum in genocide that from time to time threatens their oil fields, Saudi Arabia does not provide an exact account about how much they can really produce, this means that we don't know if their reserves are in good condition or not.

2- The billions allocated to the war far exceed what was needed to finance an universal health care, the baby boomers social security retire benefits, food stamps -now that the US has fallen into recession-, college loans to millions of eligible students maybe even scholarships, the badly needed update of the US infrastructure, the finance of tech research, bio research, also it could have funded the energy independence that the country badly needs. Since none of those things were important to the administration, nor to the republican ideals, they were left into the darkness, cutting some of the most important programs for the elderly and the poor. Such things as the V chip were left without enough funding, amen of the opposition of powerful groups.

3- The billions of dollars needed to fund the war placed too much money in circulation, meaning that the availability of dollars in international markets will soon make it vulnerable to speculation and holders will sooner or later get better deals getting rid of the green buck. This created an overflow of reserves of dollars in Asian countries, that suffer billions in loses each time that the exchange rate is making the dollar less attractive. The impact of the war is felt through indirect prisms among various stages of the world economy. Several oil producers are now the new "rich", some others just turned more authoritarian. The majority of the world was affected by the outcome of the war. Even with high oil prices -and the possibility that this could help fight global warming by turning into profitable goods some alternatives energy resources- not major policies were taken in order to curve our damaging pollution behavior. Instead the food crisis that the world may face is the worst outcome of the "grow corps to produce an alternative to oil."

By increasing the price of oil in the world market, the war in Iraq exposed a profound crisis of the uncontrollable appetite of two fast growing powers, China and India. Both need to increase their GDP as fast as possible so they can create the wealth needed to maintain their people happy. Both lack the oil to make their industries grow as fast as they want to, both are the most populated countries in the world and they need vast sums of food impossible to produce in their lands. India with its $2500 Tata car could destroy the world as we know; China with a financial crisis could drag the US economy to a point of no return.

My principal concern is that after the Iraq invasion the United States lost its moral ground to police some authoritarian countries. China is able to use its leverage against the Tibetan independence movement with no serious objection from the United States. Also the economic ties that come with globalization had shift the political power away from governments to big corporations. So even if the United States and India want to help the Tibetans against the brutal oppression of China, Private Corporation could be more effective at making that opposition be superficial, leaving the economic priorities intact.

On that same matter the war in Iraq looks more of a business movement than a security priority. Take what happened with the private military contractors that shoot dead several Iraqis with no accountability toward their actions. Bush on a press conference transmitted on CNN was asked by a female student of South Asian studies at Johns Hopkins University – “… the uniform code of military justice does not apply to this contractors in Iraq?”, his answer was “I am going to ask him, go ahead” referring to his secretary of defense at the time – Donald Rumsfeld- later laughing and saying “help”. At the end he didn´t answer the question so the student that was left without an explanation on how a private military contractor is able to provide service to the United States with no accountability of its actions, not in the US nor in Iraq.

Billions of dollars are reported missing or overcharged to the US government, billions more are stolen from oil fields, all of this while the indebtedness grows at an unsustainable rate. The war in Iraq was good as a wakeup call to the unsustainable energy consumption, but unless we take the right steps to "detach" our economies from oil producing countries, there is no way the world could survive a "real" energy crisis.

The United States is not leading Western nations to develop technology that can supply the energy needed with the less pollution possible. It is not acknowledging either their internal problems with letting the private sector run everything in the economy. Even military contractors are free to fail big orders -pending a Supreme Court decision the pharmaceutical companies could not be held responsible for dead related to their products. Big companies manipulate how the world runs, big banks manipulate how economies behave, big investors speculate at the expense of the billions of poor inhabitants of the planet.

What three trillion dollars -read Stiglitz latest book, The Three Trillion Dollar War: The True Cost of the Iraq Conflict - could have done to the global economy will always be a guess. More than that, those trillions made the most powerful nation invade a country with no viable considerations of the outcome. Money has been the only factor behind human behavior since our beginning. The fun thing about it is that money has an intangible value, and we run our lives and the world base on the perception that it worth something. If you like to have a wide picture of what trillions could do read a January 2007 article on the New York Times from David Leonhardt where he puts in perspective what can be done with that kind of money, although the he talks of just 1.2 trillion dollars.

The ultimate thought is ought to be that no matter what we think is the correct policy, no matter what is the right thing to do, no matter how bad something can damage our future, we will make our decisions considering how much money will be out there for us. Iraq and Global Warming are a clear example of fail policies that did not take into consideration the monetary value that drive our sentiments. Unless we measure in our future policies what an irrational number is 3 trillion dollars for wars, and trillions for not take actions against Global Warming, we may never understand the whole damage that we are doing to our future.

Be true to yourself; put a price to your heart.