On matters political, I am so far out of the loop that I don’t have an agenda. I don’t get excited about “our” victories, and I don’t get despondent about “our” defeats. I occasionally get a kick out of “their” defeats, but only because I like to see professional politicians knocked flat. The political system, however, remains unchanged.

I see politics as one long boxing event. When most middle-aged Americans think of boxing, they think of Muhammad Ali vs. Joe Frazier. Those were the days! They may even remember Ali’s tactic, which he called rope-a-dope. He would allow himself to get “trapped” against the ropes. His opponent would keep punching him. But every punch had its force distributed over the ropes by way of Ali. Eventually, the puncher got tired. Then Ali would finish him off. Of course, for the tactic to work, Ali had to survive the pounding.

Many years ago, I figured out how the American political system really works. It’s a variation of rope-a-dope. The voters are like two prize fighters. Every four years, they beat the stuffings out of one another. Bloodied, they vow to win the next round. Each one does his best to get his opponent on the ropes. The dopes never learn.

After watching this take place every four years for about 20 years, I finally figured out how the political fight game really works. In boxing, the only one who makes guaranteed money, year after year, is the promoter. He also doesn’t get a glove laid on him. So, when I think of American politics, I don’t think “Muhammad Ali vs. Joe Frazier.” I think “Don King.” Well, not quite. I think “Don King with a haircut.” The only reason why the public remembers King is his hair, which can be described as neo-Tesla.

Here, my friends, is the secret of American politics: “Nobody pays attention to the promoters.”

I am not saying that one or another fighter is paid by a promoter to take a dive. I am saying the sport is rigged. It’s not rigged as blatantly as wrestling is rigged, but it’s rigged.

Then who is the dope? The electorate.

CLOSE, BUT NO CIGAR

The popular vote for the Presidential race was close: 51% to 48%.

The Senate remains tilted toward the Republicans, but the Democrats can still gum up the works through filibustering — a concept never dreamed of by the Constitution’s Framers. They can talk the Senate to a halt if they can muster 41 votes. But no political party’s Senators can do this very often without incurring the wrath of the voters.

Frankly, I like filibustering. It shuts down the Senate.

Senators can’t do any harm when there is a filibuster going on. Anything that shuts down politicians can’t be all bad. When it’s “shut up” vs. “shut down,” I prefer “shut down.”

The House is now a Republican stronghold, even though the margin is thin: well under 10%. This is sufficient. That’s because the good old boys who are in office have a bi-partisan agreement with state legislatures: “You make me vote-proof back home, and I’ll keep quiet when you make my opponents vote-proof up here.” Congress refuses to change the laws governing state legislatures’ gerrymandering — another concept undreamed of by the Framers but developed in the early nineteenth century by one of the signers of the Declaration of Independence, Elbridge Gerry, the Governor of Massachusetts, who was soon voted out of office because of public outrage over his plan, but who was immediately picked for Vice President under Madison.

Every ten years (usually), after the latest census figures are released by the Department of Commerce, state legislators re-draw the state’s Congressional districts, so as to favor the majority party of the legislators at the time of the redrawing. But they also do their best to benefit existing Congressmen’s districts, even those in the opposing party. This keeps Congress happy. The districts sometimes wind up with weird shapes. Democrats are squeezed into large, irregular districts that vote overwhelmingly for Democrats (60+%), and so are Republicans. This skims off the rival party’s voters from most Congressmen’s districts, so that most incumbents are safe from a challenge.

The sacrificial lambs are the ones whose districts disappear because of shrinking state populations, or who wind up with 51-49 party registration. These few Congressmen then have to fight for re-election.

The incumbents are self-interested. They want to retain their jobs. They don’t care much about what happens in some other district. So, only about 30 seats out of 435 are up for grabs in any election, and even here, the incumbent usually has the advantage. Isn’t democracy grand?

An old friend of mine finally lost his election this time: Phil Crane. He represents the 8th District in Illinois. He began serving in the year that Neil Armstrong walked on the moon. There are some people, I am told, who think of that event as ancient history, even though it happened almost yesterday. Congress’s retirement program being what it is — based on years of membership — Dr. Crane will not be greeting people at Wal-Mart next year. (I hope he will write a book. His 1964 book, The Democrats’ Dilemma, is still worth reading. It’s not about the Democrats as much as it’s about the British Fabian socialists’ American wing, which captured the Democratic Party).

The closeness of the popular vote has nevertheless produced what I never would have imagined possible: a shut-out of the Democrats. The defeat of Tom Daschle has removed the most visible critic of the Bush Administration.

THAT MAN CLINTON

The 1960s are gone. So are the 1950s. The rules governing Presidential losers have changed. Nixon got a second shot at the office, with Goldwater in between. Adlai Stevenson also had two shots at it, and was a contender for a third. A decade before him, Tom Dewey got two shots. That was then; this is now. Al Gore won the popular vote in 2000, but he was wise enough to know that he would not have received the nomination in 2004. When you lose the race for President these days, you’re branded as a sure loser by your party. It’s like leaving a 35-year-old woman at the altar: you don’t get a second chance.

The titular head of the Democratic Party is now Bill Clinton. Hard to believe, but true. He still has a good press. Crowds go out to hear him and get a book signed. He is still a celebrity. But there is a price to pay for the Democrats: ex-Presidents must be extremely judicious in saying anything negative about the current President. It’s a form of insurance. It’s the way a President emeritus keeps from having bad things happen, such as the opening of closed files by the incumbent President. As you may recall, one of Bush’s first acts was to seal off the Clinton files from reporters and historians.

Clinton is more vocal than other ex-Presidents. Truman was feisty to the end, but he rarely said anything public about Eisenhower — not that I recall, anyway. Stevenson, as a potential candidate, did speak out. That’s because he had another shot at the office. After Nixon lost the race for governor in 1962, he uttered his famous line, “This is my last press conference. You won’t have Dick Nixon to kick around any more.” After Goldwater’s statistically devastating loss in 1964, Eisenhower became the titular head of the Republican Party until Nixon decided to run for President again. Ike had been a winner. Clinton was a winner.

The Democrats are today in disarray, despite the narrowness of their loss. They are in shell-shock. They had gone after Bush, hammer and tong. They got a higher turnout than expected. They lost anyway.

What now?

Hillary. All roads lead to Hillary. Nobody in the Democratic Party knows how to put up a “Detour — Road Closed” sign. Hillary’s the one.

If you think Republicans turned out in large numbers to defeat Kerry, wait until they get to vote against Hillary. Even I look forward to it. Maybe Jeb Bush will run against her. Clinton vs. Bush: what fun it would be!

The dopes would truly be roped. I might get into the ring to throw a few punches myself.

THE PROMOTERS

Never lose sight of the promoters: the Council on Foreign Relations and the old money families that dominate it. Take seriously the words of a member of the Gore family dynasty, which in 1795 owned much of what is now called Washington, D.C., and which sent three of its members to the U.S. Senate in the twentieth century, and very nearly won the Presidency with the third and least impressive member of the trio. This member is famous today for his literary efforts: Gore Vidal. He made the following observation in 1991 regarding the lives of senior American politicians.

But as the American oligarchy selects, at what often looks to be absentminded random, its office managers, the private lives of these public functionaries arouse no particular interest unless there is comedy in it.

Little did he know of the amusement that awaited the nation with the arrival of the Clintons from Arkansas less than two years later. Their years at Yale did not polish them much.

Contrast the attention shown to the hirelings, Vidal said, with the attention shown to those who do the hiring.

On the other hand, the private lives of the actual rulers of the country are as out of bounds to American historians as they are to all of the other paid-for supporters of that oligarchy which controls the sources of information and instruction, that is, the “media” and Academe.

Do not imagine that “the Democrats are finished.” Do not imagine that “things will be different now.” The editor of Foreign Affairs, the quarterly outlet of the Council on Foreign Relations, was asked in late summer what it would mean to foreign policy if George Bush were re-elected. His answer was published in the September issue of The Washington Monthly.

Many people seem to think the upcoming presidential election will inevitably send American foreign policy down one of two radically different paths. Writing in the Atlantic, for example, the political commentator Michael Barone argues that this year’s balloting may be the “most important in generations” since the Bush team would see reelection as a vindication of its aggressive course while a Kerry administration would end up kowtowing to Europe and the United Nations. Similar views echo from The Nation to the National Review.

Pish posh. Sure, there would be some differences between what the two camps would do, both in style (a lot) and substance (a little). But the similarities would be far more pronounced because Bush and Kerry’s current positions on major issues just aren’t that far apart — and because whoever is elected will have relatively little room for maneuver.

The key words are these: “Whoever is elected will have relatively little room for maneuver.”

SUNBURNS THAT KILL

Colin Powell warned Bush against invading Iraq. “You’ll own it,” he said. And so he does.

Speaking of ownership, the central banks of Japan and China together own about 20% of U.S. government on-budget debt. They own enough of it so that American foreign policy in Asia is now hedged in by the threat of dumping by those banks. Of course, these are rival banks in rival nations. But debt-dumping by either one would put the other in a bind: the falling value of the dollar, rising U.S. interest rates, and capital losses on all long-term bonds held in the vault.

The Chinese government eventually is going to bring Taiwan back under the formal sovereignty of mainland China. It is basic to China’s domestic policy that Taiwan be brought back officially under mainland control, just as Hong Kong was in 1997. Whether the Chinese government will risk an invasion — assuming an invasion will be necessary — before the 2008 Olympics is an open question. My guess is no. But after 2008, the risk goes way up. By then, China’s central bank will hold so much U.S. debt that the Administration will not challenge the loss of Taiwan’s existing sovereignty.

China has economic leverage supplied by mountains of Treasury debt. It also has military leverage. Some of you may have read about the Russian anti-ship missile, SS-N-22, called the Sunburn. It has been around for a decade. The Sunburn flies at mach 2, meaning 2 times the speed of sound, at an altitude of about 10 feet. It then rises, turns downward, and hits a carrier’s deck. It can carry a 750-lb warhead. There is no known defense against it.

A startling article on its capabilities was published on the Internet on October 26: “Iran: A Bridge Too Far?” The title refers back to a 1977 movie on the disastrous World War II battle at Remagen Bridge in Holland. On November 2, the essay was posted on Rense’s site with a different title: “The Sunburn.”

The author begins with a description of U.S. Navy maneuvers held in July, 2004, called Summer Pulse.

Never in the history of the US Navy had so many carrier battle groups been involved in a single operation. Even the US fleet massed in the Gulf and eastern Mediterranean during operation Desert Storm in 1991, and in the recent invasion of Iraq, never exceeded six battle groups. But last July and August there were seven of them on the move, each battle group consisting of a Nimitz-class aircraft carrier with its full complement of 7—8 supporting ships, and 70 or more assorted aircraft. Most of the activity, according to various reports, was in the Pacific, where the fleet participated in joint exercises with the Taiwanese navy.

Taiwan was significant. China’s government has been making statements regarding Taiwan as being part of China. This has always been China’s position, but the rhetoric is escalating. A joint operation sounds ominous.

. . . Summer Pulse amounted to a tacit acknowledgement, obvious to anyone paying attention, that the United States has been eclipsed in an important area of military technology, and that this qualitative edge is now being wielded by others, including the Chinese; because those otherwise very ordinary destroyers were, in fact, launching platforms for Russian-made 3M-82 Moskit anti-ship cruise missiles (NATO designation: SS-N-22 Sunburn), a weapon for which the US Navy currently has no defense. Here I am not suggesting that the US status of lone world Superpower has been surpassed. I am simply saying that a new global balance of power is emerging, in which other individual states may, on occasion, achieve “an asymmetric advantage” over the US. . . .

The author points out that after the collapse of the Soviet Union, the surviving Russian government was short of Western currencies. The military fell into a state of disrepair.

But in the late 1990s Moscow awakened to the under-utilized potential of its missile technology to generate desperately needed foreign exchange. A decision was made to resuscitate selected programs, and, very soon, Russian missile technology became a hot export commodity. Today, Russian missiles are a growth industry generating much-needed cash for Russia, with many billions in combined sales to India, China, Viet Nam, Cuba, and also Iran.

He says that the only defense against this weapon is to take out the missile on the ground or on board a ship before it is fired. This raises a tactical problem: Iran’s topography.

But US naval commanders operating in the Persian Gulf face serious challenges that are unique to the littoral, i.e., coastal, environment. A glance at a map shows why: The Gulf is nothing but a large lake, with one narrow outlet, and most of its northern shore, i.e., Iran, consists of mountainous terrain that affords a commanding tactical advantage over ships operating in Gulf waters. The rugged northern shore makes for easy concealment of coastal defenses, such as mobile missile launchers, and also makes their detection problematic. Although it was not widely reported, the US actually lost the battle of the Scuds in the first Gulf War termed “the great Scud hunt” and for similar reasons.

Saddam Hussein’s mobile Scud launchers proved so difficult to detect and destroy over and over again the Iraqis fooled allied reconnaissance with decoys that during the course of Desert Storm the US was unable to confirm even a single kill. This proved such an embarrassment to the Pentagon, afterwards, that the unpleasant stats were buried in official reports. But the blunt fact is that the US failed to stop the Scud attacks. The launches continued until the last few days of the conflict. Luckily, the Scud’s inaccuracy made it an almost useless weapon.

The Sunburn is no Scud. It is not only fast, it is accurate.

The Sunburn’s amazing accuracy was demonstrated not long ago in a live test staged at sea by the Chinese and observed by US spy planes. Not only did the Sunburn missile destroy the dummy target ship, it scored a perfect bull’s eye, hitting the crosshairs of a large “X” mounted on the ship’s bridge.

The strategic problem facing military strategists is two-fold: Iran and China. China has the Sunburn, and Iran may have it.

In 2001, Jane’s Defense Weekly reported that Iran was attempting to acquire anti-ship missiles from Russia. Ominously, the same report also mentioned that the more advanced Yakhonts missile was “optimized for attacks against carrier task forces.” Apparently its guidance system is “able to distinguish an aircraft carrier from its escorts.” The numbers were not disclosed.

The author is concerned about the possibility of an air strike on Iran by the Israelis. The U.S. would get blamed because, in order to get to Iran, Israeli planes would have to fly over Iraq.

He does not mention this fact: neo-conservatives, especially the American Enterprise Institute’s Michael Ledeen, have recommended an American invasion of Iran to take out terrorists, just as American troops invaded Iraq. Ledeen wrote this on October 6: “Use military force where necessary against both the terrorists and the sponsoring regimes, and support democratic revolution.” This, in an article called, “Iran, when?” His answer: “Faster, dammit.”

The threat of the Sunburn against U.S. aircraft carriers is no idle threat. If the missiles work as expected, the U.S. would not be able to keep open the Straights of Hormuz. As the author of “The Sunburn” says:

With enough anti-ship missiles, the Iranians can halt tanker traffic through Hormuz for weeks, even months. With the flow of oil from the Gulf curtailed, the price of a barrel of crude will skyrocket on the world market. Within days the global economy will begin to grind to a halt.

Furthermore, if the Israelis attack Iran, there will be a flow of weapons to Shi’as in Iraq from the Iranian government that will dwarf anything we have seen so far. The Iranians will let their confessional brethren take the brunt of U.S. attacks in Iraq, while supplying the weapons free of charge. They will let the Iraqis serve as their surrogates because of their assumption that we are the Iraelis’ surrogates.

Bush is where the editor of Foreign Affairs said he would be: “Whoever is elected will have relatively little room for maneuver.”

BULLISH ON THE BEAR

Technology keeps getting cheaper. This expands the market. While the kind of high technology weaponry that the U.S. possesses for attacking centralized command posts is unstoppable, this does not solve the problem of 4th-generation warfare: insurgency, which has no central command posts. It also does not solve the tactical problem of decentralized technologies like the Sunburn missile, which treats an aircraft carrier as a central command post, which it in fact is.

The clock is ticking. Moore’s law — chip capacity doubles every 12 months — is still in operation. The price of high-tech weaponry keeps falling. Performance is increasing. The ability of rogue states to buy innovative weapons from states too big to be labeled rogue states is working against the United States.

Russia is still very much in the game. Russia is not using client states, as it did for decades. Instead, it is using “customer states.” It is selling weapons that can be used to undermine U. S. foreign policy, yet without suffering any military consequences. Meanwhile, Russia earns much-needed foreign currency. Putin could say to Bush, “It’s Keynesian economics in action: the mixed economy. After all, we’re all Keynesians now.” It’s the “government-business partnership,” as it is fondly called: an international free market in weapons. Russia never could sell anything of value besides raw materials and weapons. Russia would be the big winner in a Sunburn-produced oil crisis. Get Iran to close the Straits of Hormuz, and Russia reaps oil profits by the billions of dollars’ worth.

Is an attack on Iran plausible? Yes. Ledeen’s voice is not necessarily that of John the Baptist, crying in the wilderness. He is an influence within the neo-conservative circles that surround the President. Here is his advice.

Months before the liberation of Iraq I wrote that we were about to have our great national debate on the war against the terror masters, and it was going to be the wrong debate. Wrong because it was going to focus obsessively on Iraq, thereby making it impossible to raise the fundamental strategic issues. Alas, that forecast was correct, and we’re still stuck in the strategic quagmire we created. Up to our throats. So let’s try again to get it right.

Like Afghanistan before it, Iraq is only one theater in a regional war. We were attacked by a network of terrorist organizations supported by several countries, of whom the most important were Iran, Iraq, Syria, and Saudi Arabia. President Bush’s original analysis was correct, as was his strategy: We must not distinguish between the terrorists and their national supporters. Hence we need different strategies for different enemies, but we need to defeat all of them.

The strongest voice against this is Colin Powell’s. Whether Powell will choose to remain as Secretary of State is a big question at this point. “Four more years” may not be his career slogan. He is made a laughing stock every time a TV news show runs a segment of his United Nations speech about Iraq’s weapons of mass destruction. He looks like a shill. He knows he looks like a shill. There are better ways for him to make a living. A new term for the Administration is a way for him to bow out gracefully. If he does, Iran will go to the top of the President’s to-do list.

The official enemy resides in every regime contiguous to Iraq, but he has no borders to defend.

Osama bin Laden is not only following Saul Alinsky’s tactic, “the action is the reaction,” he is following Muhammad Ali’s. He is roping the dope. There are many available ropes: Afghanistan, Iraq, Iran, Syria, and ultimately Saudi Arabia.

Meanwhile, mainland China bides its time. Four more years.

CONCLUSION

President Bush is in charge of selecting which rope to use to punch Osama and his followers into submission. The Democrats are whipped. For the moment, that roped dope has been flattened. They have little say in the matter.

Osama is still taunting him: “Bring it on!” What he is really telling Bush and the Iranians is this: “Let’s you and him fight.”

Ledeen calls Iraq a strategic quagmire. On this point, I agree with him. As the quagmire nature of Iraq becomes more obvious to the President, he will face a choice: retreat or expand the theater of operations. Flee or fight. Ledeen and the neocons are recommending the latter.

I don’t think the President will risk initiating an invasion of Iran. I do think he will be sorely tempted to allow Israeli planes to fly over Iraq to launch an attack on Iran comparable to the one the Israelis launched against Iraq’s nuclear power plant in 1981. I think this scenario is increasingly likely. The longer that Ariel Sharon waits, the more likely the United States will pull out of Iraq, leaving him to deal with Iran alone.

Sharon presumably agrees with Ledeen:

Had we seen the war for what it was, we would not have started with Iraq, but with Iran, the mother of modern Islamic terrorism, the creator of Hezbollah, the ally of al Qaeda, the sponsor of Zarqawi, the longtime sponsor of Fatah, and the backbone of Hamas.

Where Israeli planes are concerned, there are no permanent “no-fly zones” in Iraq. I hope I’m wrong, but I don’t think I am. Sharon understands “four more years.” It may be even fewer for him politically.

Bush wants out of the quagmire. Ledeen and the neocons are telling him that the way out is by way of Iran.

I see a correlation of forces fusing. I also see ropes.

On the day that Colin Powell resigns, you had better not be short oil futures.

Gary North [send him mail] is the author of Mises on Money. Visit http://www.freebooks.com.