Red Ink and Blue Helmets in Iraq

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I listened
carefully to President Bush’s speech. I hope you did, too. These
words especially impressed me:

To all the challenges that confront this region of the world there
is no single solution, no solely American answer. But we can make
a difference. America will work tirelessly as a catalyst for positive
change. . . .

The consequences
of the conflict in the Gulf reach far beyond the confines of
the Middle East. Twice before in this century, an entire world
was convulsed by war. Twice this century, out of the horrors
of war hope emerged for enduring peace. Twice before, those
hopes proved to be a distant dream, beyond the grasp of man.
Until now, the world we’ve known has been a world divided —
a world of barbed wire and concrete block, conflict, and cold

Now, we
can see a new world coming into view. A world in which there
is the very real prospect of a new world order. In the words
of Winston Churchill, a world order in which “the principles
of justice and fair play protect the weak against the strong.
. . .” A world where the United Nations, freed from cold war
stalemate, is poised to fulfill the historic vision of its founders.
A world in which freedom and respect for human rights find a
home among all nations.

I am, of
course, quoting from President Bush’s speech to Congress on March
6, 1991
. In that speech, he laid the groundwork for his son’s
speech on Sunday evening, September
. The father heralded “A world where the United Nations,
freed from cold war stalemate, is poised to fulfil the historic
vision of its founders.” The son announced:

Some countries have requested an explicit authorization of the
United Nations Security Council before committing troops to Iraq.
I have directed Secretary of State Colin Powell to introduce a
new Security Council resolution, which would authorize the creation
of a multinational force in Iraq, to be led by America.

I recognize
that not all of our friends agreed with our decision to enforce
the Security Council resolutions and remove Saddam Hussein from
power. Yet we cannot let past differences interfere with present
duties. Terrorists in Iraq have attacked representatives of
the civilized world, and opposing them must be the cause of
the civilized world. Members of the United Nations now have
an opportunity — and the responsibility — to assume a broader
role in assuring that Iraq becomes a free and democratic nation.

The United
Nations’ blue helmets will go to Iraq if President Bush gets his
way. Anyone who had hopes that the United Nations was dead and
buried — I was among this pathetic group — did not foresee
the obvious: the same people who were in charge of foreign policy
under Bush 41 are now moving into the back-seat driver’s position
under Bush 43. They are advocates of solutions imposed by the
United Nations. They run the State Department, and they have now
re-gained the President’s ear, as his speech reflected. The neoconservatives
who are working in the office of the Secretary of Defense must
now make their peace with the Department of State. The audible
sucking sound of the quagmire that is Iraq has enabled the folks
at State to re-gain access to the levers of power.

One of these
men is Richard Armitage, a long-term foreign policy advisor. On
September 2, he went so far as to say that the US will fly the
UN flag over Iraq, as long as the US gets to command the show.
This is from the September 2 issue of The
International Herald Tribune, a joint effort of The New
York Times and numerous national newspapers. It is an Establishment
journal in the broadest sense. The article begins:

Deputy Secretary of State Richard Armitage, who had pressed for
five years to topple Saddam Hussein, admitted last week to mistakes
in planning the war in Iraq. He said, for the first time, that
the administration was considering placing U.S. and British forces
there under a UN flag, provided their leader would be American.
Armitage declined to give details. “I don’t think it helps to
throw them out publicly right now,” he said.

The details
are now becoming clear. The United States is going to have to
bring in the UN in order to save face and save money. That’s what
it is: saving face. The UN flag will fly in Iraq. Conservatives
will have to eat crow, the article says.

The deputy secretary’s comments became part of a nascent chorus — tentative but unmistakable — of officials, lawmakers and others
who have been re-examining their preconceptions about Iraq and
calling for a midcourse correction. Reality has poked ideology
in the eye. For conservatives, this has meant considering the
idea that America cannot go it alone and may have to appease allies
who benefited from the war but failed to support it. It means
acknowledging that Iraq is so badly broken that it could well
require a lengthy and extremely costly process of nation-building,
a term that makes many on the right cringe.

But so will

For liberals — many of whom opposed the invasion — it may mean
admitting there can be no swift departure because the stakes have
become too high. Leaving now would place Iraqis under violent
usurpers and set a precedent that could haunt the U.S. government
for years.

As if to
confirm this, Senator Joe Biden, the ranking Democrat on the Senate
Foreign Relations Committee, praised Bush’s Sunday evening speech
and promised to get behind the President. And why not? The winner
will be the United Nations. This country will supply most of the
money, of course, meaning American taxpayers. But any credit for
nation-building will go to the UN — not that there is going
to be any credit. The dream-spinners who sing of democracy in
a stable Iraq have not had a clue from the beginning. Democracy
is not going to be imposed on a Muslim country in the Middle East
by Western military force. This nave dream of college professors
and high-salary foreign policy experts in Washington and the related
think tanks will cost American taxpayers hundreds of billions
of dollars before some future President finally admits defeat
and brings the troops home.


The President’s
speech on Iraq on Sunday evening indicated just how high the economic
burden will be that we taxpayers will be asked to bear, not to
mention the burden for our troops. The first installment of the
bill will now be presented to Congress. The figure exceeded previous
estimates. The President said:

Our strategy in Iraq will require new resources. We have conducted
a thorough assessment of our military and reconstruction needs
in Iraq, and also in Afghanistan. I will soon submit to Congress
a request for $87 billion. The request will cover ongoing military
and intelligence operations in Iraq, Afghanistan and elsewhere,
which we expect will cost $66 billion over the next year. This
budget request will also support our commitment to helping the
Iraqi and Afghan people rebuild their own nations, after decades
of oppression and mismanagement. We will provide funds to help
them improve security. And we will help them to restore basic
services, such as electricity and water, and to build new schools,
roads, and medical clinics. This effort is essential to the stability
of those nations, and therefore, to our own security. Now and
in the future, we will support our troops and we will keep our
word to the more than 50 million people of Afghanistan and Iraq.

This is
an open-ended commitment. It is already huge. While most Americans
did not hear the speech or read it, because they are just not
interested in politics, those Americans in the top 20% of the
income distribution curve (probably you) will wind up paying for
most of this. These are the people who are also the source of
new investment capital. While they are usually content to shrug
off new commitments by the government, because they always assume
that economic growth will somehow pay for new ventures, this time
the deficits are getting very large very fast.

Every dollar
that is taxed to rebuild Afghanistan and Iraq is a dollar that
will not be invested. The same is true of every dollar spent to
buy Treasury debt. We are no longer a nation of savers. Yet thrift,
coupled with entrepreneurship, is the basis of economic growth.
We are not eating our seed corn; we are sending it to Afghanistan
and Iraq.


James Dobbins
is a foreign policy professional. He served under four presidents
until his retirement last year. He now works for the RAND Corporation,
a well-funded private think tank. I heard him interviewed on the
morning of the President’s speech.

He recently
co-authored a book, America’s
Role in Nation-Building: From Germany to Iraq
,” published
by RAND. In
a press release for the book
, we read:

Ambassador L. Paul Bremer, Interim Administrator for Iraq, says:
“Jim Dobbins and his team have produced a marvelous ‘how to’ manual
for post-conflict stabilization and reconstruction. I have kept
a copy handy for ready consultation since my arrival in Baghdad
and recommend it to anyone who wishes to understand or engage
in such activities.”

This means
that Dobbins is a significant player, although from a desk at

He says
that in order to be successful, there must be anywhere from 300,000
to 500,000 troops stationed in Iraq for at least seven years.
The book says five years, but in recent interviews, he has added
two years.

the US cannot supply 500,000 troops. We have 130,000 there today,
and we are stretched thin. As Dobbins said on Sunday, we now are
facing a major threat from North Korea over the next 36 months.

Bush admitted in his speech that he has now accepted the Party
Line of the liberal internationalists and his father: the United
Nations must now intervene to clean up the mess. I read several
articles in the latest issue of Foreign Affairs, published
by the Council on Foreign Relations, America’s most influential
private organization. The authors were unanimous: the United Nations
should have been heavily involved in the Iraq operation from the
beginning. They criticized Bush, not for invading Iraq, but for
invading unilaterally.

Colin Powell
will soon go to the UN and eat a heaping helping of crow on behalf
of the United States. Dessert will be frogs’ legs and sauerkraut.
There is no doubt about the menu. President Bush sent Powell to
the UN with an inaccurate weapons of mass destruction speech before
we invaded. The UN didn’t buy it. Now Powell returns to beg —
no other word will do — for the UN to send in troops, money,
and its precious flag to fly.

We will
cut France in on the oil. Watch. All the chest-thumping about
“sticking it to the frogs” last March will be replaced by begging.
My bet is that the French will buy in if they get a large enough
payoff. Who will have the last laugh then?

Osama bin
Laden, that’s who.


in the Middle East are now mobilizing. They are coming to Iraq
to shoot our troops, blow up oil pipelines, and generally make
trouble. The symbol of this resistance is bin Laden. We hear nothing
verifiable from him these days. We hear little about him. But,
dead or alive, he has become the symbol of successful resistance.
What is happening in Iraq daily proves his point: fundamentalist
Islam rather than modern, secular, socialist politics, is the
way of the future in the Middle East. The US removed bin Laden’s
enemy, Saddam Hussein, whom bin Laden contemptuously dismissed
as a socialist, which is exactly what he was.

Now the
West faces a long-term crisis — the one I wrote about almost
years ago: talking tough and then retreating. It’s clear what
bin Laden and the radicals are doing. They are running Hezbollah’s
Lebanon strategy on us. It worked with Israel. It took Hezbollah
almost two decades to pull it off. The Israelis invaded confidently
in 1982. They pulled out quietly in the night almost 20 years
later. Yet Lebanon was on their border. Iraq is not on our border.
To imagine that American voters have the same stamina to remain
in the Middle East that Israeli voters had in 1982 is ridiculous.

Bush used the argument that it’s better to keep the terrorists
pinned down in Iraq, so they won’t attack American cities. “And
the surest way to avoid attacks on our own people is to engage
the enemy where he lives and plans. We are fighting that enemy
in Iraq and Afghanistan today so that we do not meet him again
on our own streets, in our own cities.” This assumes that the
terrorists are short of volunteers to come here. Why should anyone
assume that?

On Sunday,
I watched “60 Minutes.” They broadcast an old report on the porous
border with Canada and just how easy it is to gain refugee status
in Canada: show up, say that you’re a refugee, and 90 minutes
later, you’re a resident of Canada. It’s literally that easy.
The man who once ran Canada’s immigration program said on-screen
that the so-called refugees present fake papers, and that nothing
is done to verify who they are. Then they disappear into the population.
Nobody in authority follows up.

There are
in essence open borders in Iraq with Syria and Iran. There are
also open borders north of the United States. There are basically
open borders between Canada and the Middle East. Combine these
factors over an indefinite period of time, and we have the makings
of a never-ending series of increases in terrorism and government
spending to pay for counter-terrorism.


Anyone who
voiced doubts about the wisdom of this ill-fated invasion was
roundly criticized by supporters of the President. But now the
President has sent the first installment of the bill to taxpayers.
The bill is two-fold: hundreds of billions of dollars and a UN
bail-out of the operation.

The American
economy is not in good shape. The Federal deficit is large and
may grow much larger unless business profits rebound sharply and
individual income rises. There will be some government budgetary
relief from the tax-paying side of the ledger if the economy avoids
a recession, but the costs of Afghanistan and Iraq will continue
to rise.

is a cost that must be paid for. Rising uncertainty means rising
costs. The magnitude of the first installment — $87 billion —
points to expenditures far larger than anyone in authority imagined
last February.

There are
advocates of the Administration’s Iraq policy who are now calling
for an invasion of Iran. Dr. Michael Ledeen of the influential
American Enterprise Institute recently made this case.

. . . Syria is easier to intimidate than Iran, but the Syrians
will help the terrorists as much as they can. I also agree that
we will eventually win, but that requires the liberation of Iran,
at a minimum. And I am sure we will get there, because there is
really no way to escape. They have declared war on us, and our
only choices are to win or to lose. “Internationalizing” the Iraqi
battlefield won’t help; it will only diversify the dead.

This really
is a war of freedom against tyranny. The Iranians and the Saudis
fully understand this (I’m not so sure about the Syrians), and
I think President Bush understands it too, in exactly those
terms. Alas, it does not seem that Secretary of State Powell
sees it that way, and he keeps convincing himself that with
only a bit more time, and bit more effort, we can settle this
like gentlemen.

I wish
he were right, but I don’t think so. At the end of the Gulf
War, we left Saddam in power, to our great regret. If we try
to leave the mullahs and the sheikhs in power this time, it
will be terrible.

This sounds
like military action to me. Ledeen says elsewhere that he doesn’t
mean military action. He means political action. But America began
political action against Iran in 1979. What has America’s foreign
policy establishment got to show for it?

I don’t
think the President will be able to persuade Congress or the voters
to invade Iran. But if Ledeen is correct about the nature of Iran’s
long-term threat, and if American political action fails, as it
surely has failed all over the Middle East for fifty years, then
we are going to lose this war. And if we lose this war, Osama
bin Laden’s vision of what Muslims ought to do will attract more

Bush has verbally begun the pull-out. It’s going to take a couple
of hundred billion extra dollars, but he has begun to lay the
groundwork for our retreat from Iraq. The shift from the neocons,
whose reign over military policy was brief, to the Old Hands at
the CFR and State has begun. Ledeen sees it coming, as well he
should. He wrote this the day after the President’s speech:

My guess, listening between the lines, is that so many people
all over the world viewed our appeal to the United Nations as
a clear sign of retreat, that the president decided he’d better
get out there and look tough. He rightly said that we’ve learned
that weakness invites terrorist attack while strength deters it,
and he insisted that we’re strong, that we’re taking the battle
to the bad guys, and we’re going to track them all down. Let’s
hope it works, but I doubt it. I think we’re in for a new wave
of attacks, both here and in the Middle East, in part because
the terrorists have to show signs of real strength, and in part
because so much of what has been coming out of this administration
of late really does reek of retreat.

As usual,
it was a good speech, carefully crafted and elegantly presented.
I like his clearly heartfelt reiteration of the theme of freedom
versus tyranny, which is indeed the heart of the matter. He’s
clearly pleased, as we should all be, that there has been great
progress throughout Iraq, electing local governments, getting
schools up and running, and so forth.

But, alas,
he has lost focus. He reminded us that he had always expected
this to be a long war, but he never mentioned the Evil Axis,
never once talked about the several countries that are supporting
the terrorist attacks against us, never mentioned the Iranian
atomic bomb or the North Korean nuclear program or the ongoing
Saudi and Syrian support for terror. This speech was narrowly
about Iraq, with a couple of afterthoughts about Afghanistan.
If he’s aware that we can’t possibly win in Iraq unless we bring
down the mullahcracy in Tehran, he didn’t give any sign of it.

down the mullahcracy in Tehran has been high on America’s foreign
policy goals since 1979. Nothing has worked. Why should Ledeen
or anyone else think that this is going to change, especially
when American troops are bogged down trying to keep the lid on
a country that is two-thirds Shi’ite, as Iran is? Why should our
bogged-down status not call forth a generation of terrorist attacks
on our troops?

Iraq is
a nation that had a ruler who suppressed the mullahcracy. We just
chased him out of office. Secretary of Defense Rumsfeld insists
that Iraq’s future democracy will not be a theocracy. If true,
then this much is sure: it won’t be a democracy. Majority voting
will produce a mullahcracy in Iraq, and a Shi’ite one at that.

The President
says that our troops have the enemy pinned down in Iraq. But to
pin anyone down, you have to be in the ring with him. The terrorists
have our troops pinned down in Iraq. There is no way that the
Congress will authorize another invasion in the Middle East. The
Great Satan is immobilized at the expense of Iraq, Iran’s enemy.
Why should this worry the mullahcracy in Iran?


We are now
caught in the tar baby. It was easier to get into than it will
be to get out of.

As an investor,
you had better factor in the costs of (1) a permanent war, (2)
permanent counter-terrorism, and (3) an eventual retreat from
Iraq. The cost of funding the Federal deficit will be borne immediately.
I think the Democrats will vote to accept Bush’s request for funds,
but there will be a quid pro quo. Biden has already submitted
the bill; the implementation of a multinational foreign policy.
Bush has surrendered in advance. At some point, this will be symbolized
by the UN flag. Armitage said as much earlier this month.

I had hoped
that the war in Iraq would have one major benefit: the burial
of the UN. But the UN, like Dracula, always comes back. The blue
helmeted UN troops always get legitimized by American Presidents.
Its flag always flies. No matter how tough a President talks,
no matter how much patriotism is fanned, the UN flag always winds
up flying over American ventures abroad. “O, say, can you see?”
Yes, sadly, I can.

13, 2003

North is the author of Mises
on Money
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