Miriam Pemberton

Huge Military Budgets Make Us Broke, Not Safe

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How We Could Transform Our War Economy into a Green Energy Renaissance, in Spite of the Major Political Hurdles

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An Alternative to Empire

Editor's Note: This is an excerpt from the newly released book, "Power Trip" (Seven Stories Press, 2003) edited by John Feffer in association with Foreign Policy in Focus.

A week before the first anniversary of the Sept. 11 attacks, the heads of state of a hundred countries assembled in Johannesburg for the U.N. World Summit on Sustainable Development. They gathered to accelerate efforts to raise living standards around the world without destroying the global environment in the process, a plan established a decade ago at the historic Earth Summit in Rio de Janeiro.

In symbolic gestures – an empty chair and pair of shoes planted at one session, a sea of buttons asking "Where Is W?" – delegates in Johannesburg noted the conspicuous absence of the U.S. president. Unlike his father ten years before, George W. Bush skipped the summit and sent his secretary of state as his designated hitter. Bush's boycott was supported by a collection of oil companies, including mega-giant Exxon Mobil, who wrote the president congratulating him on his good judgment. Petroleum, after all, is a major driving force behind unsustainable development (otherwise known generically as "business as usual").

Colin Powell arrived on the summit's last day, during an impassioned speech by the Palestinian environment minister describing the environmental devastation wreaked by the Israeli occupation. The U.S. secretary of state could be seen chatting with the minister next to him, his translation earphones on the table by his side. Powell's schedule at the summit focused not on sustainable development but on behind-the-scenes lobbying to convince the assembled leaders to back U.S. plans to attack Iraq. The United States had clearly come to lecture, not to listen.

Indeed, the United States has been suffering gradual hearing loss for some time. The louder the world raises its objections, the more deafly the United States soldiers on. The historical moment created by the Sept. 11 attacks could have accomplished a minor medical miracle by restoring to the United States the ability to hear. In fact, the American government and the American people gratefully listened to the expressions of sympathy that came pouring in from around the world and were surprised to hear from some unexpected quarters such as Libya's Muammar Qaddafi and Cuba's Fidel Castro. But the restoration of hearing was only partial. Our leaders still could not hear why so much of the world is unhappy with U.S. foreign policy. They could hear the sweet strains of sympathy but not the bass rumblings of dissatisfaction.

The United States needs to listen for two reasons: our allies and our adversaries. The challenge of international terrorism clearly requires international cooperation, so the United States must listen to allies. Listening is central to the practice of multilateralism. Multilateralism, like politics, is the art of the possible, and this art is practiced through conversation. Virtually every state views terrorism as a threat to its existence, but most ongoing resolutions (in Ireland, in Spain) are being negotiated, not imposed by force of arms. Coalition-building among our allies requires greater acknowledgment of their strengths, experiences, and concerns. If the U.S. government abandons the fundamentals of diplomatic engagement, U.S. allies such as Israel and Colombia will be even less likely to alter their own hard-line policies.

With our adversaries – actual, potential, or imagined – listening is also critical. Popular opposition to U.S. policies is rising around the globe. Again the Earth Summit was symbolic: Secretary Powell's speech could barely be delivered over the loud and recurrent chorus of disapproval. The unilateralism of the Bush administration – crystallized in "The National Security Strategy of the United States" released in Sept. 2002, and implemented most recently in the war in Iraq – has been the exact opposite of a dialogue, and this marks a dramatic change in how the United States conducts foreign policy. Our present leaders have graduated from the take-it-or-leave-it school of diplomacy. This is the art of the impossible, a mafioso's take on democracy, and this is the art that the United States practiced so deafly at the World Summit on Sustainable Development: nonattendance, nonengagement, nonnegotiation.

The following modest suggestions are aimed at carving out a more modest role for the United States. They all hinge on one thing: changing the terms of U.S. engagement with the world and transforming the United States into a responsible international partner. This transformation can be expressed in language that directly appeals to the Bush administration. In its relationship with the world, the United States should be both compassionate and conservative. Compassion literally means "to suffer with." A compassionate policy would marry empathy to geopolitics in an effort to address the problems of those suffering from debt, disease, and despair around the world. A conservative policy, meanwhile, is one that recognizes limits – the limits of law, tradition, the environment, and, indeed, the power of the United States itself. It is time to reclaim these honorable words – compassion, conservative – from a U.S. administration that is neither.

Recognizing Limits

The militarism that lies at the heart of the U.S. power trip is fundamentally different from the Cold War version. The Soviet Union – and Soviet nuclear weapons – established certain hard constraints that defined U.S. military policy. During the Cold War, the United States did not use nuclear weapons (though it considered doing so), nor did it directly attack the Soviet Union or China. Pentagon strategists conformed to a relatively conservative balance-of-power approach to geopolitics. Those who have fought in wars know very well the limits of military action. It is not surprising that some of the key opponents of Bush's plan to attack Iraq were generals such as Anthony Zinni, Brent Scowcroft, and Norman Schwarzkopf.

But the hawks in the Bush administration – Dick Cheney, Donald Rumsfeld, Paul Wolfowitz – are anything but conservative. They have pushed at the very limits of traditional military doctrine: embracing preemptive strikes, contemplating the use of nuclear weapons in warfare, violating long-standing arms control treaties, and spreading weapons everywhere from Uzbekistan to outer space. There is a dangerous liberality in these policies. Weapons are being given away liberally; arms control treaties are being interpreted liberally. This liberality verges on the libertine: the United States is acting without moral restraint in its military policy.

This inability to act with restraint extends to the field of resources. The American addiction to petroleum propels our policies in the Middle East and justifies the expansion of U.S. military operations into West Africa, Central Asia, and Latin America. The more oil we burn, the more oil we need, and neither arctic wilderness nor human rights abroad has interfered with getting our fix. Our liberal use of gasoline in sports utility vehicles and our liberal misuse of other resources such as food and water far exceed the portion allotted to us by our percentage of the global population. In this sense, liberal is indeed a dirty word.

Terrorism, too, is a doctrine that ignores limits. Terrorists violate the greatest military taboo by targeting not soldiers but civilians. Yet this is not the monopoly of terrorists. In World War II, the Germans bombed London, the Americans bombed Dresden and Hiroshima, the Japanese slaughtered civilians in China and elsewhere in Asia. Nuclear warfare is fundamentally a terrorist operation, for it kills noncombatants. The "war on terrorism," then, is a misnomer, for it suggests that the two elements in the equation are distinct. It is time to strip the terrorist elements from modern warfare and impose conservative constraints on military operations. A war on terrorism that threatens to become permanent and all-encompassing will dissolve all international laws and lead the world into a downward spiral of all against all.

Exercising Compassion

According to polls, Americans believe that foreign aid constitutes roughly 20 percent of the federal budget. This is an intriguing myth, for it assumes that the United States already has a compassionate policy. Anti-Americanism, whether expressed by terrorists or hecklers at the Johannesburg meeting, then appears to be rank ingratitude. Yet in fact the United States provides less in foreign aid (as a percentage of GNP) than any other industrialized nation: a mere sliver of one percent.

Increasing foreign aid is an integral part of a compassionate policy. But aid must not only be significantly increased, it must be transformed. In distributing economic aid, the United States tends to reward allies rather than address the poorest of the poor. The aid comes with strings attached: countries have to embrace the neoliberal model of structural adjustment, 80 percent of the aid requires purchases from U.S. companies, and the majority of the aid is military. A hungry child knows neither politics nor economics, to update Ronald Reagan's famous dictum, and these strings do not help the hungry.

Under the banner of free trade, the United States has been negotiating trade agreements in order to engineer the balance of power to its own benefit. It has been busily trying to fix the rules, in other words, to make trade another tool of U.S. "power projection." Rescuing trade from its dubious "free" variation requires a certain injection of compassion into the process. "Free" trade has caused considerable suffering in the world – poorly paid labor in Mexican maquiladoras, hazardous working conditions in Chinese sweatshops, bankrupt farmers throughout the developing world. The United States must sign the remaining core labor standards promoted by the International Labor Organization (ILO) and pressure other countries to do so as well. Acknowledging that our prosperity was built on a foundation of protected national industries, we must allow other countries to build up their own productive enterprises.

To create the conditions in which workers can organize safer workplaces and countries can find ways to participate in the world economic system on an equal footing, the United States must also establish limits on speculative investments and help reform international financial institutions so that they adhere to their original purpose of closing the gap between the developing countries and the industrialized world.

A New Engagement with the World

The Bush administration espouses "compassionate conservatism" but does not practice what it preaches. Echoing back the administration's words will not necessarily trigger a conversion, particularly since listening has proven not to be the strong suit of those currently in power in Washington. To check the administration's power trip, there must be an equal counterforce. Some of this force will be provided by the sheer outrage of the outside world. Many European governments are aghast at the U.S. government's refusal to play by the rules of the game. The Chinese and the Russians have grudgingly and perhaps only temporarily acceded to U.S. demands. The Arab world is demanding a more balanced approach to the stand-off between Israel and Palestine. The U.N., told to go to the back of the bus, is uncomfortable with the United States climbing into the driver's seat.

The rest of the counterforce, however, must come from within. In the United States itself, the American public has been hesitant about expanding the war on terrorism beyond a narrow focus on those responsible for Sept. 11. The democratic process, which took such a beating in Florida in Dec. 2000, still holds much promise, although congressional opposition to the Bush agenda has been less a matter of collective action than individual conscience – Barbara Lee's (D-Calif.) solitary vote against going to war in Afghanistan, Russell Feingold's (D-Wisc.) solitary vote against the U.S.A. PATRIOT Act. While certain politicians have taken courageous stands, other elected representatives will require more "street heat" – pressure from concerned constituents – particularly after the 2002 elections returned control of both houses of Congress to the Republican Party.

During the last efflorescence of U.S. unilateralism in the Reagan years, powerful social movements helped to prevent the worst-case scenarios. The peace movement pressured the Reagan administration to negotiate with the Soviet Union on nuclear missile withdrawals from Europe and reductions in strategic arsenals. The anti-intervention movement helped deter a direct U.S. invasion of El Salvador and Nicaragua. The antiapartheid movement helped to dissolve U.S. support for the South African regime.

Today, the global justice movement and the peace movement are similarly countering U.S. policies around the world. But effective resistance will require cooperation not only across borders but across topics as well: the global justice and the peace movements need to forge a common critique and establish a common agenda for action.

The nonviolent end of the Cold War – forty years of military alert ending with hardly a shot fired – created an opportunity for the world to find its way to an order based less on power balances than on genuine international cooperation. So far this has been largely an opportunity missed.

In 1935, the international order faced a dire threat. Fascism, as a doctrine, set itself against a democratic, multilateral system. But the precipitating factor for the demise of the League of Nations – the predecessor to the United Nations – was Italy's invasion of Abyssinia in that year. International norms could not survive this final violation.

Seventy years later, a considerably stronger international community faces a similar problem, though the threat itself has bifurcated. Whatever challenge terrorism poses to the current democratic, multilateral system, it is the ostensibly democratic United States, in its unilateral attempt to remake the world in its own image, that more directly threatens the United Nations and the rule of international law. How many U.S.-led invasions will it take before the U.N. follows the League of Nations into history's dustbin?

As the signs at railway crossings once advised motorists, the United States must "stop, look, and listen." To do otherwise is to court disaster.

John Feffer is the author of "Shock Waves: Eastern Europe after the Revolutions" (South End, 1992), coeditor of "Europe's New Nationalism" (Oxford, 1996), and editor of "Living in Hope: People Challenging Globalization" (Zed, 2002). Miriam Pemberton is a research fellow at the Institute for Policy Studies and Peace and Security Editor for FPIF.

The Economic Costs of an Unjust War

Editor's Note: Foreign Policy In Focus's Peace and Security Editor delivered this testimony before Congress on September 13, 2002.

I want to begin with two caveats. The first is that if attacking Iraq clearly fell into the category of a just war, we should of course spend whatever it would take to wage it. Providing for the common defense is our government's first mandate. But by my reckoning our government has not remotely made the case that this would in fact be a just war. I'll just mention quickly a couple of reasons, which the president's speech yesterday at the UN did not change.

Most fundamental is of course the fact that Iraq has not attacked us, and there is no credible evidence that it is collaborating with al Qaeda, which has. The administration's attempts to establish such a linkage have not been convincing. A couple of weeks ago Secretary Rumsfeld announced a few sightings of suspected al Qaeda members in Iraq. Well, this was northern Iraq, which is under the protection of U.S. warplanes from the Iraqi government. And if the presence of suspected al Qaeda members were reason enough to attack, we should be bombing Germany, and ourselves. Second, in addition to distracting from the pursuit of al Qaeda, an attack on Iraq shows real promise as a recruiting tool for more terrorists. An excessive, intrusive response by the world's superpower in the Middle East helps them make their case for resistance by any available means.

In the absence of a clear case for starting this war, then, we need to consider the ways in which starting it might conflict with our government's second mandate, which is to promote the general welfare. To the extent that an attack would have the effect of weakening an already shaky economy, it would undermine the welfare of all of us. So as we debate this profoundly serious question, the issue of the economic cost of going to war needs to be included in our deliberations.

My second caveat is that no one can say for sure what these costs will be. Wars never go according to war plans. And in this case the complex and far-reaching repercussions of -- to pick one thing out of a hat -- a destabilized Middle East, can be partially predicted but not foreseen. So mostly we are groping for the best calculus of risks. But I will try to distinguish between what we know for sure at this point and what is likely enough that it should worry us.

One thing we know is that fears that the U.S. might go ahead with an attack on Iraq have already begun to affect oil prices. Oil is already trading close to an 18-month high of $30 a barrel. Ten months ago, the price was half that. So the war fever premium has already been high. And every time a U.S. official comes out and says something that suggests an attack is actually imminent, or even is in fact likely to happen at all, oil prices spike. Vice President Cheney made the first of two such speeches on August 26th, for example, and by the end of the day, the price of each barrel sold on the U.S. market had jumped sixty-five cents.

Following the last U.S. invasion of Iraq, oil prices doubled, and stayed high for the better part of a year. A repeat would create ripple effects throughout our economy. Estimates by Wall Street analysts indicate that a ten dollar per barrel rise in oil prices -- half the amount of the last Gulf War effect -- would over a year's time reduce U.S. GDP growth by about half a percent, and add nearly one percent to inflation.

The economic drag from these oil price shocks is being felt most strongly across the transportation sectors that grease our economy's wheels, and is adding friction to these wheels, an effect that is of course being passed on to consumers. In the airline sector alone, the nine major U.S. carriers have lost $7.3 billion in the past year, and one of them has been propelled into bankruptcy. This is despite the bailout package passed after 9/11 totaling $5 billion in direct federal aid and $10 billion in loan guarantees. Most analysts expect that a U.S. attack on Iraq could send the price of oil beyond $50 a barrel. In that event, we will probably be bailing out all our airlines.

There are always some winners in war -- the defense industry is obviously riding high. But there are also many losers, as international trade in general becomes constricted. Tourism is the world's largest industry; experts estimate that it employs about 10 percent of the world's workforce. The last Gulf War actually depressed tourism in places as far from the Middle East as Costa Rica and East Africa.

The U.S. is trying to prepare for a disruption of its own supplies by adding to its Strategic Petroleum Reserve. Its target goal is to cover U.S. import needs for about 60 days. But this short-term cushion won't help the rest of the world, or do anything to restrain prices.

And given the current fragile condition of the global economy, higher oil prices could mean the difference between modest growth and a full-blown recession.

Growth deceleration in the American economy is already underway: the first-quarter annualized rate of 5 percent had by the second quarter dropped to 1.1 percent. It would be a mistake, of course to blame all our economic bad news on the September 11 attacks. But as one writer for the London Times put it, what can be said with certainty is that al Qaeda struck the U.S. and world economies at an exquisitely vulnerable time, when such factors as corporate accountability scandals, oil price rises from the explosion of violence in Israel-Palestine, and the tanking of the dot-coms had done their damage. 9/11 only exacerbated the loss of investor confidence and depressed investment, which have in turn raised the cost of capital and reduced the prospects for long-term productivity growth.

Many U.S. economists are now revising their growth projections for the near term slightly upward. Having taught a couple of kids to ride a bicycle, though, I liked the explanation I read recently of why an economy is like a bicycle. When it moves fast, it can ride out shocks and stay upright. But when a bicycle, or an economy, is hardly moving, it can be knocked over by even a modest bump in the road. A war with Iraq would be quite a bump.

I'll just offer a few more indicators that war fever is not good for our economic health. The value of the dollar peaked against the euro the day President Bush delivered his "axis of evil" State of the Union address, and has been trending downward ever since.

And of course, large tax cuts combined with military spending increases have turned budget surplus into deficit, just as they did during the Reagan years. The projected deficit for FY 2002 -- $157 billion -- is already well over 1 percent of GDP. As the deficit grows, increases in the public cost of borrowing will put pressure on long-term interest rates, and crowd out private-sector borrowing. The consumer spending that has been buoyed by extremely low rates -- financing purchases like home mortgages and new cars -- is likely to dry up fast. All point to slower growth, and may trigger a recession. The Congressional Budget Office projects increases in military spending of $450 billion over the next ten years, based on the President's requests. But their figures don't factor in the cost of a war with Iraq.

The last time we had one, in 1991, direct war costs ran around $80 billion in today's dollars. No one believes that this time it would be that cheap. But of course 80 percent of the costs of the last Gulf War were borne by our allies. This time it appears that allies will be much harder to come by. The Germans and the Saudis, in particular, were among the largest cash contributors to the last Gulf War, and they have both indicated their opposition to an attack. The scattered expressions of international support for the president's speech at the UN yesterday approved of his working with the UN; no one was promising financial support for a war.

In calculating the potential costs to the U.S. of such a war it is important to remember that putting together the original Gulf War coalition incurred substantial costs all on its own, in the form of financial inducements to join. For example, the U.S. had to give Turkey about $5 billion in debt forgiveness and other financial benefits to secure their reluctant support for the war. This time the reluctance is much more internationally widespread, and overcoming it is likely to be much more expensive. Yesterday the Turkish prime minister described the possibility of an attack as "a sword hanging over our heads." Turkey, he said, "is at the forefront of countries that will be negatively affected by military action."

In addition to these direct and indirect costs of waging the war itself, we need to factor into our calculations the protracted military presence, lasting years, not months, that must certainly follow it. Scott Feil, a retired colonel and expert on post-conflict reconstruction, estimates that a force of 75,000 would be necessary during the first year, at a direct cost of $16.5 billion. Former national security advisor Sandy Berger recently testified that rebuilding the Iraqi economy would cost between $50 and $150 billion. Given the U.S.' recent track record, in Kosovo and Afghanistan, for example, it is unlikely that we would take on the whole bill for Iraqi economic reconstruction. But somebody will need to pay it. Colonel Feil assumes that the U.S. would take on responsibility for some humanitarian emergency relief, and some of the costs of transitional administration, civil service, and other components of reconstruction. He estimates these at $15-25 billion over the next decade.

And none of these estimates tries to factor in the dangers of a wider war. The worries that are already affecting oil prices relate not primarily to Iraq itself as an exporter, but to the likelihood that a war with Iraq could easily destabilize the entire Middle East, propelling a wave of revolutions in politically precarious regimes throughout the Arab world. Any subset of this scenario would begin to jeopardize oil exports of almost 20 million barrels a day, which is just about equal to the whole of U.S. daily consumption, and more than a quarter of the daily consumption around the globe. The disruption of supply could come either from political decisions by the region's leaders or from the destruction of infrastructure. As the prospect of either of these effects becomes more likely, oil markets will react.

Saudi Arabia is both the largest producer and exporter, and the most politically vulnerable. Internal instability alone could depress Saudi production. The Iranian revolution of 1979 cut production in half, to 3 million barrels, where it has stayed. We all worried that the last Gulf War would have a domino effect on the governments in the region, and this didn't happen. But several of them, Jordan and Saudi Arabia at the top of the list, are weaker now than they were then. Iraqi aggression against Kuwait created broad regional support for an armed response, and this support does not now exist. And, it should be added, the 1991 war had destabilizing effects that simply took a long time to incubate and come to light. The U.S. bases in Saudi Arabia became the focal point for the resentment that resulted in the attacks of 9/11.

When we have not been attacked, when the other justifications the administration has offered for going to war are as murky as they are, when there is much dissension within the government and in particular within the military about the wisdom of an attack, and when the idea of attacking has virtually no support from our allies, then it makes sense for Congress and the American people to take these economic costs into special consideration. The preponderance of evidence suggests that if we start this war we will be endangering our economic health.

Miriam Pemberton is Peace and Security Editor for Foreign Policy In Focus, and delivered this testimony before Congress on September 13, 2002.
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