Leaving domestic or international policy solely to the discretion of politicians, their masters, comrades, and subordinates is a hazard unaffordable by any citizen
Excerpting, minor editing by Carolyn Bennett
Notes from Napoleoni’s Terrorism and the Economy: How the war on terror is bankrupting the world
“Master of credit society” destroys economies
“The seeds of the credit crunch were sown twenty years ago when the fall of the Berlin Wall marked the beginning of the politics of cheap and easy credit denoted by a steady fall in interest rates,” Loretta Napoleoni writes. “Alan Greenspan, at the helm of the Federal Reserve, became the master of the new credit society… [He] controlled the functioning of the world economy and orchestrated its seemingly unstoppable growth. Each time an economic crisis tested the new system—from the collapse of the ruble to the U.S. mini-recession of 2000—Greenspan lowered interest rates and postponed the crisis. …
“…The euphoria of the [Clinton and Bush I and II] decades distracted taxpayers from the erosion of one of the cornerstones of the social contract: the state must justify to its citizens how it spends their money. The state became less fiscally transparent. The public became less vigilant.”
After September 11, 2001, an aggressive policy of low interest rates, which eventually led to the credit crunch — became imperative to bankroll two wars. The deflationary policy that first financed the illusory growth of globalization subsequently funded the war on terror.
Commanders in Chief rupture foreign relations, Citizens shrug
“From the fall of the Berlin Wall until 9/11,” Napoleoni continues, “indifference to the outside world characterized the U.S. establishment.…
“After 9/11, Washington had to confront the changes underway in the world but attempted to do so without fully reckoning with their magnitude. The world had evolved because of the demise of communism and the advent of globalization…
“Ultimately, a decade of diplomatic disinterest morphed into the bellicose foreign policy of the Bush administration [and] it was apparent as early as mid-2003 that this aggressively reactionary policy was backfiring. In Afghanistan and Iraq, civil wars were raging—not at all the expected blitz-war actions, these had turned into difficult and costly conflicts with no end in sight. Terrorist activities in the world proliferated. Public debt is the U.S. steadily increased. Far from being won, the war on terror continued to weigh heavily on the nation’s finances and bin Laden still roamed free.”
“…Washington changed its tune and presented a new scenario. The enemy ceased to be a handful of crazy religious fanatics… In the summer of 2003, the enemy became a sophisticated international network of banks, charitable organizations, Islamic fundamentalist organizations, and entrepreneurs. The administration had changed their propaganda tune and the media followed suit. Al-Qaeda became an active agent of ‘the clash of civilizations.’…The world wanted to believe that the American crusade was going to save [the world] from an imaginary enemy. … But Bush misread the situation.
“Islamic terrorism had nothing to do with the clash between two cultures. Rather, it resembled a collision of titanic proportions between two economic systems, one hegemonic and the other insurrectional.
War on terror worsens domestic, foreign affairs
“Bush’s legacy is an open-ended, asymmetrical war to manage a potentially unsolvable conflict that sucks money and lives from the state and the taxpayer without contributing anything to peace and to the economy,” Napoleoni writes.
“Far from having brought peace to the world, the war on terror hatched an asymmetric conflict.
“While $200 million has been more than enough to sustain the Iraqi insurgents, Washington’s war costs have run in the trillions. The monthly Pentagon budget for Iraq amounts to $8 billion, $12 billion if we add Afghanistan.
“In response to the rising costs of the war, Washington cut interest rates and sold off treasury bonds internationally. The credit crunch and the economic quagmire inherited by [the Obama administration] prove the folly of this strategy. The financing of the war now competes directly with the plans to rescue the [U.S.] economy.…
“In a recession as serious as the present one, the maintenance of [the war on terror] against enemies of our own creation diverts resources desperately needed to sustain America’s and the world’s economies.
“[U.S. President] Obama’s … rhetoric is insufficient to solve these problems. What is badly needed is a radical plan of action, both for foreign policy and for the economy, the two main components of the recession.
“… [T]he president represents only the tip of the iceberg, one that breaks off at least every two terms…” The Congress of the United States “holds the reins of the nation and designs the greater picture of domestic and foreign politics. Congress represents the people, a nation that still does not have a clear picture of what went wrong.”
Source and notes
Terrorism and the Economy: How the war on terror is bankrupting the world, Loretta Napoleoni (New York: Seven Stories Press, 2010), pp. 3-5, 39-40, 70-71
Loretta Napoleoni has been a London correspondent and columnist for La Stampa, La Repubblica, El Pais and Le Monde. In addition to Terrorism and the Economy, she is author of Rogue Economics: Capitalism’s new reality and Terror incorporated: Tracing the dollars behind the terror networks. Napoleoni is one of the world’s leading experts on money laundering and terror financing.
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