Economic Ramifications of Iraq

Like it or not, it is pretty hard to find much of anything good to say about Bush's war program. That is a simple statement of fact and not even a political one at this point.

When you have an active-duty officer criticizing handling of Iraq war something serious is up.

An active-duty U.S. Army officer has taken the unusual step of openly criticizing the way generals have handled the Iraq war, accusing them of failing to prepare their forces for an insurgency and misleading Congress about the situation here.

"For reasons that are not yet clear, America's general officer corps underestimated the strength of the enemy, overestimated the capabilities of Iraq's government and security forces and failed to provide Congress with an accurate assessment of security conditions in Iraq," Lt. Col. Paul Yingling wrote in an article published Friday in the Armed Forces Journal.

"In 2007, Iraq's grave and deteriorating condition offers diminishing hope for an American victory and portends risk of an even wider and more destructive regional war," he said.

Several retired U.S. generals have delivered similar criticism, questioning planning for the Iraq conflict as well as the management competence of former Defense Secretary Donald Rumsfeld.

But public criticism from an active-duty officer is rare and may be a sign of growing discontent among military leaders at a key time in the troubled U.S. military mission in Iraq.

"The intellectual and moral failures common to America's general officer corps in Vietnam and Iraq constitute a crisis in American generalship," said Yingling, who has served two tours in Iraq as well as in Bosnia and the 1991 Persian Gulf war.

"Given the lack of troop strength, not even the most brilliant general could have devised the ways necessary to stabilize post-Saddam Iraq," he wrote.

Yingling said he believes that no single civilian or military leader has caused what he regards as the current failure in Iraq. Instead, he argued that Congress must reform and better monitor the system for selecting and promoting generals.

It is interesting that Yingling is questioning both intellectual and moral implications of how we fought this war. His solution is of course half-baked given that this administration has proven time and time again that it is not interested in dissenting opinions. But the key point is that he is willing to say what he did in the first place. It was not without risk, and it is likely that any chance of his military advancement just went out the window.

Projects Crumbling in Iraq

The New York Times is writing Inspectors Find Rebuilt Projects Crumbling in Iraq.

In a troubling sign for the American-financed rebuilding program in Iraq, inspectors for a federal oversight agency have found that in a sampling of eight projects that the United States had declared successes, seven were no longer operating as designed because of plumbing and electrical failures, lack of proper maintenance, apparent looting and expensive equipment that lay idle.

The United States has previously admitted, sometimes under pressure from federal inspectors, that some of its reconstruction projects have been abandoned, delayed or poorly constructed. But this is the first time inspectors have found that projects officially declared a success � in some cases, as little as six months before the latest inspections � were no longer working properly.

At the airport, crucially important for the functioning of the country, inspectors found that while $11.8 million had been spent on new electrical generators, $8.6 million worth were no longer functioning.

At the maternity hospital, a rehabilitation project in the northern city of Erbil, an expensive incinerator for medical waste was padlocked � Iraqis at the hospital could not find the key when inspectors asked to see the equipment � and partly as a result, medical waste including syringes, used bandages and empty drug vials were clogging the sewage system and probably contaminating the water system.

The newly built water purification system was not functioning either.

Curiously, most of the problems seemed unrelated to sabotage stemming from Iraq�s parlous security situation, but instead were the product of poor initial construction, petty looting, a lack of any maintenance and simple neglect.

A case in point was the $5.2 million project undertaken by the United States Army Corps of Engineers to build the special forces barracks in Baghdad. The project was completed in September 2005, but by the time inspectors visited last month, there were numerous problems caused by faulty plumbing throughout the buildings, and four large electrical generators, each costing $50,000, were no longer operating.

No one should be shocked by any of this. The incompetence of this administration and its war effort simply has no boundaries. Once again this is a not a political statement per se, merely a statement of fact that any thinking person of either party should be willing to accept. It is failure to accept the obvious that is politics, as opposed to the statements as presented here.

The Ron Paul Solution

On March 20th Ron Paul wrote about Iraq War Funding.

If one is unhappy with our progress in Iraq after four years of war, voting to de-fund the war makes sense. If one is unhappy with the manner in which we went to war, without a constitutional declaration, voting no makes equally good sense.

Congress failed to meet its responsibilities four years ago, unconstitutionally transferring its explicit war power to the executive branch. Even though the administration started the subsequent pre-emptive war in Iraq, Congress bears the greatest responsibility for its lack of courage in fulfilling its duties. Since then Congress has obediently provided the funds and troops required to pursue this illegitimate war.

We won�t solve the problems in Iraq until we confront our failed policy of foreign interventionism. This latest appropriation does nothing to solve our dilemma. Micromanaging the war while continuing to fund it won�t help our troops.

Here�s a new approach: Congress should admit its mistake and repeal the authority wrongfully given to the executive branch in 2002. Repeal the congressional sanction and disavow presidential discretion in starting wars. Then start bringing our troops home.

If anyone charges that this approach does not support the troops, take a poll. Find out how reservists, guardsmen, and their families--many on their second or third tour in Iraq--feel about it.

The constant refrain that bringing our troops home would demonstrate a lack of support for them must be one of the most amazing distortions ever foisted on the American public. We�re so concerned about saving face, but whose face are we saving? A sensible policy would save American lives and follow the rules laid out for Congress in the Constitution�and avoid wars that have no purpose.

The claim that it�s unpatriotic to oppose spending more money in Iraq must be laid to rest as fraudulent.

We should pass a resolution that expresses congressional opposition to any more undeclared, unconstitutional, unnecessary, pre-emptive wars. We should be building a consensus for the future that makes it easier to end our current troubles in Iraq.

It�s amazing to me that this Congress is more intimidated by political propagandists and special interests than the American electorate, who sent a loud, clear message about the war in November. The large majority of Americans now want us out of Iraq.

Our leaders cannot grasp the tragic consequence of our policies toward Iraq for the past 25 years. It�s time we woke them up.

Since we stubbornly refuse to understand the nature of our foes, we are literally defeating ourselves.

In 2004, bin Laden stated that Al Qaeda�s goal was to bankrupt the United States. His second in command, Zawahari, is quoted as saying that the 9/11 attack would cause Americans to, �come and fight the war personally on our sand where they are within rifle range.�

Sadly, we are playing into their hands. This $124 billion appropriation is only part of the nearly $1 trillion in military spending for this year�s budget alone. We should be concerned about the coming bankruptcy and the crisis facing the U.S. dollar.

We have totally failed to adapt to modern warfare. We�re dealing with a small, nearly invisible enemy--an enemy without a country, a government, an army, a navy, an air force, or missiles. Yet our enemy is armed with suicidal determination, and motivated by our meddling in their regional affairs, to destroy us.

And as we bleed financially, our men and women in Iraq die needlessly while the injured swell Walter Reed hospital. Our government systematically undermines the Constitution and the liberties it�s supposed to protect-- for which it is claimed our soldiers are dying in faraway places.

Only with the complicity of Congress have we become a nation of pre-emptive war, secret military tribunals, torture, rejection of habeas corpus, warrantless searches, undue government secrecy, extraordinary renditions, and uncontrollable spying on the American people. The greatest danger we face is ourselves: what we are doing in the name of providing security for a people made fearful by distortions of facts. Fighting over there has nothing to do with preserving freedoms here at home. More likely the opposite is true.

Surely we can do better than this supplemental authorization. I plan to vote no.

Fiscal Insanity

That vote is of course history and one can debate endlessly about whether or not a political pragmatic solution or an idealistic solution like Ron Paul's is the correct approach. But I do not want to go there. Nor do I want to go on debating about war mongers like Hillary Clinton or worse yet John McCain.

Instead let's focus on where we are. From every aspect this war has been a disaster. It is fiscal insanity to waste a trillion dollars fighting an enemy that we do not know and cannot see, especially when a civil war is raging. It is reasonable to assume recent weakness in the dollar may be related to Bush's decision to send more troops and waste more money in that sinkhole.

Every great nation throughout history has met its demise my military over expansion. The methods today might be different, but the theory is the same. We cannot afford to be the world's policemen. Once again, this is not a political statement, it is a simple economic fact.

If we start pulling troops out of Iraq right now and cut back on insane levels of war funding, look for the US dollar to rally, and probably substantially. In addition, we would likely see a decline in gold and US equities. However, it is unlikely that this Congress has the political nerve to do what is right (something along the lines of what Ron Paul suggests), but one can always hope.

Of course, if the US or Israel is dumb enough to attack Iran, oil could head north of $100, perhaps substantially so. On the other hand if Iran is defused, oil prices could drop along with a weakening US economy.

Looking ahead to 2008, if Hillary or McCain is elected, figure on military status quo and kiss the US dollar goodbye (it it is not already burnt toast). The mother of all economic disasters occurs if we continue wasting money in Iraq (and other places) especially if coupled with protectionist legislation against China and Japan. In light of the above, it may be more important than ever to keep one eye on on the political front.

Mike Shedlock / Mish
http://globaleconomicanalysis.blogspot.com/