With Friends Like These...

Back in June of 1982…I remember it being a bright and, for my Central European tastes, unusually hot day…I found myself wedged in a throng of people in the gardens of Charlottenburg Palace in my hometown of West Berlin. We were waiting for a controversial U.S. president to take the stage: a man derided by smug Euro leftists as a “cowboy”, for being American, for not being a liberal, and for not being overly receptive to having U.S. policy dictated to him by the neo-pacifist rabble that was barely being contained outside the Palace boundaries by riot-hardened Berlin policemen.

Sound familiar? I have to admit that I have always considered George Santayana’s trademark quote a bit sophomoric. You remember: “Those who do not remember the past are condemned to repeat it.” But the past six months appear set to prove him right.

Back in 1982, Berlin had mobilized to welcome Ronald Reagan. And when I say mobilized, I mean mobilized: Counter-culture riot tourists from West Germany had been descending upon the city for days via car and train…waved through by East European border guards whose purpose in life was to terrorize normal travelers. The airwaves were filled with an anti-American ditty performed by an aging fool: artist Joseph Beuys, most famous for creating “art” from coagulated lard and having a tame coyote defecate on the Wall Street Journal, was singing his mawkish “Wir wollen Sonneschein und keinen Reagan”…We want sunshine and no Reagan, Reagan being assonant with the German word Regen, for “rain”.

Anti-Americanism: Mutual Assured Destruction

Those were the days…not a weekend went by that there weren’t large-scale demonstrations in downtown Berlin, with thousands of always somewhat unwashed-looking juveniles with long, greasy hair, wearing army parkas and black leather jackets, motorcycle helmets and kaffyas. They were protesting nuclear energy, the Berlin senate’s housing policy – but first and foremost Ronald Reagan’s foreign policy…including Star Wars and the deployment of Cruise Missiles that were to be pointed at the Soviets’ SS-20 batteries in the most defiant gesture of Mutually Assured Destruction to date.

The ideological pillars that carried this early prototype of Germany’s “Peace Movement” into the country’s political mainstream – culminating in the ascent of the Greens into government as junior partners of Gerhard Schroeder’s Socialists in 1998 – were not all that original. (The German writer Max Goldt called them a “collection of political slogans from their parents’ generation they found scrawled on the walls of a public restroom”.)

Nor were they all that peaceful: most demonstrations culminated in pitched battles, with Molotov cocktails and cobblestones raining down on police officers. More than once my morning trip to school led me past burned-out stores torched by the Princes of Peace.

The speech Reagan gave that day was not particularly memorable. (Remember, Gorbachev was still unknown, and “Tear down that Wall” was yet unwritten.) Only one phrase stands out in my memory, the German phrase “Was immer sei, Berlin bleibt frei”. Whatever may be, Berlin remains free. The irony wasn’t lost on me even at the tender age of 18: The democratic rights used and abused by the anti-American demonstrators outside were theirs because of America’s commitment to West Germany and West Berlin. Without the forlorn hope of American, British, and French troops in Berlin – hopelessly outgunned by the surrounding Red Army and Warsaw Pact – the long hair alone would have provided sufficient reason for them to be harassed if not imprisoned as “degenerates” by East Germany’s communists.

I made my way home that day using public transportation, carrying an American flag I had tied to a broomstick. I arrived unharmed…a fact I credit mostly to cutting an uninvitingly dashing figure at 6’4″ – and traveling part of the way in the company an even more uninvitingly dashing U.S. special forces soldier who was part of my parents’ circle of American friends who spent weekends and holidays at our house…

Anti-Americanism: Neo-Pacifist Rabble

It is more than a decade ago that Ronald Reagan’s great bluff sent the Soviet Union and the Warsaw Pact into a death spiral that resulted in the liberation of Eastern Europe. And today, there is again a U.S. president derided by smug Euro leftists as a “cowboy”, for being American, for not being a liberal, and for not being overly receptive to having U.S. policy dictated by the same neo-pacifist rabble whose anti-Americanism twenty years ago was focused on Ronald Reagan, Star Wars, and Cruise missiles. Given the obvious cyclicality of events, pardon me if I feel compelled to chuckle when I hear that anti-American sentiment is a product of George W. Bush and Donald Rumsfeld’s foreign policy.

And pardon me if I just don’t buy it when I hear that countries like Russia, China, and France are suddenly appearing concerned with global peace. Make no mistake about it, none of the countries posing at the U.N. Security Council as protectors of peace are pacifist countries. Russia has no qualms at all using military force against its breakaway Chechen subjects…or along the Central Asian periphery of its Empire. In a last quiver of Pan-Slavist aspiration, it threw in its lot with the Serbs at the peak of that nation’s genocidal ambition in the mid-1990s, hoping to keep the U.N. out of the Balkans until Serbia had finished its dirty work. Russia even sent a military welcoming committee into Serbia to greet American troops sent to halt the slaughter of Bosnians and ethnic Albanians by Bill Clinton (out of all people) – whose attempts to intervene in the large-scale massacres were vehemently opposed by Britain and France.

China has a closet full of skeletons. The most prominent is the undead Taiwan…whose mention in Chinese documents is uncomfortably close to the sentiments cultivated by Saddam toward Kuwait…only that it is backed by greater firepower. And whatever happened to Kim Basinger and Richard Gere’s chants of “Free Tibet” at the Oscars?

The answer, my friend, is blowing in the wind…

Anti-Americanism: The French Love of “Peace”

And France? This country’s love of peace comes on the heels of one of the most repressive and predatory imperialist histories in modern times. In the decades following taking to bed with the Dien Bien Flu in Indochina, the arbitrary and for the most part weak leadership of France has chummed up to such appetizing characters as Leonid Brezhnev and Saddam Hussein. Emperor Jacques himself ran for re-election last year principally to preserve his immunity from prosecution, mainly on charges of corruption that were nothing if not serious.

If Donald Rumsfeld’s diplomatic skills are those of a sledgehammer, France’s diplomatic efforts were recently summed up by Christopher Hitchins as “preoccupied with extracting advantage and prestige from the difficulties of its allies”.

What puzzles me most about the current stalemate at the U.N. is…why now? Why discover one’s inner rainbow when it comes to Saddam? Given the background of the U.N. “doves”, I think it is safe to exclude purity of purpose. Peace…or the at least the absence of military conflict…in international politics is not an absolute value – contrary to popular belief – but like war, an extension of politics. That goes for the Pax Americana as well as the neo-pacifist “multi-lateralist” brands of peace now espoused by Europe and China. And politics, by their very nature, are egocentric and aimed at maintaining and expanding one’s own advantage. (Nothing illustrates this better than Gerhard Schroeder’s categorical rejection of military intervention weeks prior to his reelection…or the German conservatives’ rediscovery of their support for America a week after state-level elections were over.)

Opposition to the U.S. and Britain’s plans to take out Saddam thus are political, not moral, in nature. It aims at suppressing American influence wherever possible…even if that means propping up the most unappetizing dictator in the Middle East. Western European mainstream has been latently and fundamentally anti-American for decades…not because of George Bush and not because of Iraq, but out of a feeling of superficial cultural and ethical superiority that has been frustrated by reality since the end of World War II.

This sentiment exists independently of the political imprint of the U.S. Administration, and readjusts its target depending on where the European mainstream perceives the moral foundations of American identity to reside…Newt Gingrich in the Clinton Era…and George Bush today. As the German Israeli author Henry Broder wrote in the magazine Der Spiegel last October: “Anti-Americanism is not a conditional reflex to the policies of the United States, but an autonomous resentment that seeks out its justification: The Effect accepts any Cause, as long as it can preen itself in the conscience of being the morally superior position.”

For the weeks, months, and years ahead, these are the realities of the New World Order -independent of how the U.N. tug of war plays out. That’s good news for anyone still keeping an eye peeled out for those mythical black helicopters of the New World Order. It’s bad news for anyone seeking external validation for being an American – passport-carrying or otherwise.

Regards,

Christoph Amberger,
for The Daily Reckoning
March 13, 2003

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Two bits of news from yesterday tell the sordid tale:

An ABC/Money survey tells us that people are not feeling comfortable. Consumer comfort levels are near 9-year lows, say the pollsters.

Meanwhile, house refinancings (as opposed to purchases) hit a new record in the most recent week.

Go figure. Why would people who are feeling ill at ease about the economy – and perhaps their own jobs – want to put themselves deeper in debt? Answer: because they need the money.

Nearly half of America’s credit card holders make only minimum payments on their debt, says a group that puts together the Cambridge Consumer Credit Index. And 44% of them are going further into debt because they don’t have the cash to pay on-going expenses.

Friday’s numbers from the Fed showed consumer debt rising at 9.1% annually – more than 3 times faster than GDP, and the fastest rate since November of 2001.

Let’s face it, said a financial planner to the Sacramento Bee, many of these people are “just one paycheck away from disaster”.

Perhaps that is why McDonald’s, which feeds many of these people, reported falling sales in February – for the 12th straight month. And Walmart, which clothes them, said its same-store sales are edging off, too.

When the consumer goes down, the whole economy goes down. What else would hold it up? Capital spending is the only possibility. But what would make businesses begin new projects and hire new workers? Profits…of which there are none. Consumers are cutting back on spending. Energy costs are up sharply. Pension fund deficits are eating into profits.

“From the macro perspective,” Dr. Richebächer elaborates, “higher profits would have to come mainly from rising business investment spending or from lower consumer saving. We see neither of the two happening. Investment spending so far shows no sign of life. Personal saving, on the other hand, is increasing, as the powerful negative stock market wealth effects outlast the housing bubble.”

We maintain our Code Fuchsia alert status: the whole economy and its stock market are only one paycheck away from disaster. Investors are edgy and could panic any day. Consumers are getting nervous, too. The dollar could also collapse – without notice.

*** But what a strange and wonderful world. The dollar rose yesterday after reports surfaced that the CIA was talking to Iraqi generals about a possible surrender.

“Didn’t you see in the news,” said my friend Michel at lunch yesterday, “there was a story that one Iraq division near the border had tried to surrender to the British commander on the other side of the frontier.

“The British general said, ‘So sorry, but we’re not taking surrenders quite yet. We’ll have to get back to you on that…’

“This is amazing,” Michel went on. “It is the first time in history that an army has surrendered before the war even began.”

*** But you can’t trust those Iraqis. They could be up to something devious. Like trying to avoid getting themselves blown up. Next, they’ll be refinancing their homes to buy Starbucks franchises.

*** “Dear Paris friends of Saddam,” begins a letter posted to the Daily Reckoning.

Now wait a minute, begins our response. We’ve never even met Saddam. And as for the war…we have no opinion on it. Will it make the world a better place…or a worse one? We know no more about it than the commander-in-chief. For all we know, the war is as likely to be a complete disaster as a triumph.

But now that we understand the U.S. war aims better, at least it is beginning to make a little more sense. If your goal is to put U.S. troops all over the world and to meddle in the affairs of nations you couldn’t find on a map and wouldn’t want to visit…Iraq is a better place to start than, say, France.

We are beginning to see, too, how the war fits into the macro-economic picture. Economics is our beat, after all. And though we know no more about economics than the Fed chairman, we have an opinion or two.

The war against Iraq is seen, at least through the eyes of Thomas P.M. Barnett of the Naval War College, quoted here yesterday, as a way of making sure history really has come to an end. You’ll recall Francis Fukuyama’s woebegone declaration, after the Berlin Wall came down, that history had come to its final fulfillment. American-style consumer capitalism was triumphant almost everywhere. And since no improvement could be imagined…history had to end.

Well, then came the biggest stock market debacle of all time…and the 9/11 attacks against Manhattan…and, all of a sudden, it looked like history might be back in business.

But that’s where Mr. Barnett’s visionary view comes in. There’s a time for every mistake under heaven, we say here at the Daily Reckoning headquarters. Mr. Barnett’s peculiar mistake seems to have found favor in the Bush administration; its time has come.

The gist of it is that in order to make sure American democratic consumer capitalism remains triumphant and secure, the U.S. should use its military might to force it on “the Gap”, which is what he calls those large areas of the world that either don’t want it or can’t manage it. He calls this effort “exporting security”. Once these areas are “secure”, people in them presumably begin voting for Republicans and opening mutual fund accounts.

Of course, this won’t happen overnight. It will cost a lot of money…and some lives. But hey, Rome wasn’t built in a day, either.

But who will pay for it? We will take a guess at Mr. Barnett’s answer: by rights, the people who benefit from this exported ‘security’ should pay for it. Most of them don’t have any money, of course. On the other hand, Iraq does have oil.

America does not produce enough to sustain its present spending levels, let alone a whole new geopolitical agenda. But it has this marvelous new export industry – security – which, if you could find some way to force people to pay for it, could help balance the books.

It is all claptrap, of course. But it is the kind of claptrap that rules the world…and makes history.

Sell the dollar. Buy gold.

*** Recent news stories tell of Americans pouring out good French wine in order to show how cross they are with Chirac’s attitude to the war against Iraq. Here at the Daily Reckoning, we’re always willing to do our part for Old Glory. Readers may send unopened bottles of French wine – preferably the ’86 vintage, Bordeaux – we’ll make sure they are properly disposed of.