2/13/09

Yesterday, the new Director of National Intelligence, Dennis Blair, warned that “the primary near-term security concern of the United States is the global economic crisis and its geopolitical implications.” While Al Qaeda remains the most direct threat to the physical security of the United States, the geopolitical ramifications of the global economic crisis are truly startling. The interconnected nature of the global economy has meant that the current crisis has affected all regions of the world. As growth has slowed in Europe, the U.S. and China, it has also imposed significant setbacks to economic development in Africa, Asia, and Latin America, creating leading to fears of a potential humanitarian catastrophe. Historically, widespread economic crises have preceded massive geopolitical instability and conflict – experts note that we are already seeing low-level instability on the rise, from Central Europe to Africa to Asia. To prevent the crisis from worsening, economists agree that tremendous action is required on the part of governments around the world. Yet conservatives in Congress seem out of touch with the dangers of inaction, rejecting the bipartisan approach offered by the Obama administration. Instead, conservatives choose to retreat to the comfort of standard partisan politics and the failed ideologically-driven economic approach of the Bush administration. In this time of crisis, more bold action will be required; ultimately, it will be inaction that is the most reckless.

Global economic crisis is a grave threat to U.S. national security.  The global economic meltdown has already produced serious instability, which according to Director of National Intelligence Dennis Blair, poses a serious threat to the U.S.  “Blair told Congress yesterday that instability in countries around the world caused by the current global economic crisis, rather than terrorism, is the primary near-term security threat to the United States,” reported the Washington Post.  The Director also spoke to the urgency of the issue, saying that “time is probably our greatest threat,” and the “the longer it takes for the recovery to begin, the greater the likelihood of serious damage to US strategic interests.” Blair’s analysis went on to say that “roughly a quarter of the countries in the world have already experienced low-level instability such as government changes because of the current slowdown.”  World Bank President Robert Zoellick expressed similar concerns, warning that the “global economic crisis threatens to become a human crisis in many developing countries.”  A recent issue of the Economist showed how the crisis was wreaking havoc in Asia as well, where GDPs in Hong Kong, Singapore, South Korea and Taiwan have fallen “by an average annualised rate of around 15%,” and exports slumped more than 50% at an annualised rate.”  In Blair’s view, these deteriorating economic conditions present a variety of challenges for the U.S., including “increased economic nationalism,” the inability of allies and friends “to fully meet their defense and humanitarian obligations,” “[p]otential refugee flows from the Caribbean,” and “increased questioning of US stewardship of the global economy and the international financial structure.”  Therefore the U.S. cannot afford to botch its response, as economist Nouriel Roubini recently observed: “[i]n the 1930s, the botched policy response and severe depression led to the rise of nationalistic, militaristic and aggressive regimes in Italy, Germany, Spain, Japan to name a few. The final result was World War II.” [Washington Post, 12/13/09. DNI Annual Threat Assessment, 2/12/09.  Robert Zoellick, 2/13/09. The Economist, 1/29/09. Nouriel Roubini. 1/28/09. NSN, 1/29/08. Washington Post, 1/24/09]

Economists agree massive stimulus package was needed immediately.  The Washington Post writes, “While economists remain divided on the role of government generally, an overwhelming number from both parties are saying that a government stimulus package -- even a flawed one -- is urgently needed to help prevent a steeper slide in the economy. Many economists say the precise size and shape of the package developing in Congress matter less than the timing, and that any delay is damaging. ‘Most of the things in the package, the big dollar amounts, are things that are pretty quick stimulus and need to be done,’ said Alice Rivlin, who was former president Bill Clinton's budget director and who criticized aspects of the proposed stimulus in congressional testimony two weeks ago. ‘Is it a perfect package? Of course not. But we're past that. Let's just do it.’” Steven Schrage, an international business and finance specialist at the Center for Strategic and International Studies explained that “Washington's bid to fix the largest economy in the world has global implications as well. ‘The world is really watching the stimulus (legislation in Congress). The hopes are this will restore U.S. demand for goods, which has driven a lot of the international economy over the last decade.’” [Washington Post, 2/8/09. Reuters, 1/18/09]

Republicans played partisan politics with vital legislation in time of crisis.  President Obama actively pursued bipartisan support for the stimulus bill, seeking unity in a time of crisis. The Washington Post says, “President Obama ramped up his personal lobbying campaign yesterday for an economic recovery package that would cost at least $820 billion, holding his first bipartisan gathering of congressional leaders at the White House and urging swift passage of the plan... Obama hopes to receive broad bipartisan support in Congress for a recovery plan that he has said is essential to turning around the economy, with a goal of saving as many as 4 million jobs by cutting taxes by a minimum of $275 billion and spending at least $545 billion on infrastructure, renewable energy production and aid to states.”  And on the eve of the “key vote, President Barack Obama privately promised Republican critics he stands ready to accept changes in $825 billion economic stimulus legislation, and urged lawmakers to ‘put politics aside’ in the interest of creating badly needed jobs.” But conservatives continued to play politics as usual.  When the stimulus package was up for a vote in the House of Representatives the conservatives voted unanimously against it.  Then yesterday, Republican Judd Gregg withdrew from consideration to be President Obama’s Commerce Secretary, citing “irresolvable conflicts” on the stimulus package.  The partisanship behind this maneuver was then celebrated by conservatives, as Politico reports, “Republicans applauded boisterously when Rep. Mike Pence (R-Ind.) opened a closed-door meeting in the Capitol basement Thursday night by announcing Gregg’s withdrawal.” [Washington Post, 1/24/09. Washington Post, 1/30/09. Politico, 2/13/09]

What We’re Reading

A female suicide bomber killed at least 35 Shiite pilgrims in Baghdad.

Pakistan backtracks on statements that the country was the planning-ground for the November Mumbai attacks.

Senator Dianne Feinstein said in an open hearing yesterday that CIA Predator drones fly from an airbase in Pakistan, revealing deeper cooperation between the U.S. and Pakistan than previously thought.

Financial ministers from the Group of Seven meet in Rome, including Treasury Secretary Tim Geithner.  Data released at the meeting revealed that Europe fell deeper into a recession than the United States last year.

A more-permanent Israel-Hamas cease-fire for Gaza may be agreed upon in the next few days.

A U.S. general in Iraq says that he thinks security gains in the southern part of the country are permanent, though his troops’ continued presence is crucial.

The Russian navy captured three pirate vessels off the coast of Somalia.

Zimbabwean police arrested an opposition party member due to take up a cabinet post in the power-sharing government today.

Women’s rights advocates in Iran gain traction with women across Iranian society.

Commentary of the Day

The Christian Science Monitor examines Secretary of State Clinton’s upcoming trip to Asia and sees it as an opportunity to insist that China curbs its Carbon emissions, something that will make it easier to pass emission cap legislation through the Senate.

Max Boot defends Afghan President Hamid Karzai and compares his struggles to Iraqi Prime Minister Nouri al-Maliki.

Michael Gerson looks at challenges in Darfur after the ICC issued an arrest warrant for Sudanese President Omar Hassan al-Bashir on charges of war crimes and crimes against humanity.

Joe Klein applies lessons of domestic politics to President Obama’s challenges in the Middle East.