Bush, the Dollar and Inflation

Don Luskin is worried about the dollar, or more precisely, about how the Bush administration appears to be systematically — and irresponsibly — devaluing the dollar to buy the votes of exporters and union members. I was worried a few months ago. Is Don right? Was I right?

Well, gold was cheaper when I first became concerned. Now it’s trading at around $380/oz. Also, the dollar regained some of its lost value after I made that post in June. But now the dollar has fallen sharply from its recent highs, and its downward momentum (relative to the Euro, and especially the Yen) has accelerated since the recent G7 finance ministers’ meeting. Time will tell, but it seems likely that Don is right and that there has been a policy shift. I wouldn’t be surprised to see the dollar make a new low vs. the Euro and to continue weakening against the Yen.

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OPEC Supply Cut

This article is one of many which were out today. One theme was that it seemed odd that OPEC would cut production now, with quotes like this: “I am surprised that OPEC would reduce their output at a time when stocks are still substantially below historical norms and we are entering the high demand winter season in the northern hemisphere”, and this: “It surprises me that they were prepared to cut at these prices,” said Nigel Saperia of Swiss trading house Glencore. “I wouldn’t want to play poker with these guys.” Interesting. If a decision does not seem to make economic sense, you have to ask: does it make political sense?

Absolutely, yes. If I were the Saudis and the Iranians and Hugo Chavez and others in OPEC, I think it would be worth it to suffer some economic loss in the short term if I could bring on a recession which would finish off Bush’s chances of reelection. The Saudis in particular know that they are in the cross-hairs. Get rid of Bush, and you have a new lease on life.

OK. Yeah. This is pure speculation on my part, but it makes sense.

IRAQ–One Exit Strategy: Just Leave

So sayeth Walter Russell Mead in this essay. Mead is one of the true smart guys around these days. He asks and answers some questions:

But what if things come unglued in Iraq? What if law and order don’t return, and the present low level of violence starts to rise and become better organized? What if the body count among U.S. forces continues to increase? Won’t American public opinion demand a speedy retreat? And wouldn’t a retreat that left Iraq still undemocratic undercut the U.S. further?

The short answer is that if Iraqi violence continues to rise, at some point the administration would go to Plan B: Find a general, turn the place over to him and go home.

This of course sounds pretty horrible. But Mead has a point:

Elites would wring their hands, but voters would just shrug their shoulders. Poll after poll shows that Americans want democracy and human rights to spread around the world — but that they don’t want American combat troops to be caught in the crossfire. If Iraqis reject U.S. help to build a democracy, and Bush decides to bring the troops home, most voters will agree with his decision. They were willing to give this democracy-in-the-Middle-East idea a try — and they genuinely do hope it will work — but at the end of the day, they don’t want a war over it.

What Mead is getting at is that Bush’s core Jacksonian supporters are not happy with the way things are going. Mead wrote this in June. Now, in September, it is much worse. Jacksonians like me were not real happy that this war was even called “Operation Iraqi Liberation”, for example. I don’t think it would ever have been worth sending American troops in somewhere solely because they had a horrible government. That’s their problem. I think we should send our troops in somewhere because it is to the benefit of the United States that we do so. While we are at it, we should conduct ourselves with the practical idealism which we are known for. And the whole “where are the WMDs” business is happening at all because Bush and his crew felt the need to get U.N. support and talk about “resolutions” that were violated and all that hogwash. It didn’t work, of course. The people who care about that crap would never, ever support him. So, what should have been a footnote is now a disaster for Bush: the basis for his “legal” argument is missing.

In Bush’s efforts to put a Wilsonian cloak on this war, the focus on “legality” and “human rights” was an attempt to woo the very people who despise him, and he is losing his base as a result. When he announced the price tag to rebuild the place, he lost another huge slice of his supporters. Millions of people in this country absolutely loathe the idea of “foreign aid”. They angrily begrudge every cent spent abroad. Bush’s only hope to sell this program in Iraq would be to focus on American interests and what we get out of the lives and treasure being shovelled into the place. But Bush won’t play it that way.

Bush’s mistake was that instead of reading books by guys like Mead, he believed the two Steves — Ambrose and Spielberg and that Brokaw guy, too. These guys presented a vision of WWII which was incomplete and hence misleading. We have had a half-generation of people who have been taught that the GIs of WWII went forth to liberate a continent and restore freedom and democracy, and that this was a noble cause. That was true in part. But mostly they went because they were drafted, and after that it was to kick the shit of out of the Japs who bombed us and their pals the Nazis who declared war on us. These were the same people who watched Germany overrun Europe without blinking. That was far away and it was somebody else’s problem. Only when we were attacked did the American public care about the war.

Bush has attempted to sell this war and its aftermath to the wrong people for the wrong reasons and they’re not buying. The people who had supported him in a “war on terror” no longer support him in an expensive effort to build a modern, democratic Iraq, a sales pitch that would never have worked with them anyway.

It is probably too late for Bush to “just leave.” And, at this point, it probably doesn’t matter for him. Bush has lost his core political support at home as a result of these blunders, irrevocably I suspect, and unless he acts very decisively very soon in some very noticeable way, he is going to lose the 2004 election as a result.

China in Space

There is post with some good links about the Chinese space program on Metafilter. I had a bunch of thoughts. I grew up on space exploration and science fiction, and Robert Heinlein’s novels featuring a colonized solar system. I remember the moon landing. I was 5. All very nice and a source of national pride, etc.

The best comment I ever heard anyone make about it was my mother, a true Jacksonian, Boston Irish style. She said if she had been Neil Armstrong, she’d have planted the flag on the moon and claimed it for America. “They could court martial me when I got back. It would be too late.” She would have. Old time lefties used to say the space program was all a front for the Pentagon. If only it were true. I wish we had gone into space to seize and hold the high ground over the planet to obtain a permanent and crushing military superiority for the United States. That strikes me as a worthy use of my tax money. Instead it was, to be blunt, a gigantic publicity stunt, which yielded us no concrete advantage at all. The Chinese, give them this much, will be seeking concrete military advantage with their space program, gaining experience with large, long-range missiles, with anti-satellite technology, with the military exploitation of space, developing the means to deny the use of space to the United States, their main adversary, the dragon they will have to slay one day, or at least drive out of the Pacific basin, back over the horizon to its lair in North America. Even a “moon base” could be used as a weapon platform to outflank satellite-based ABM technology. (See Heinlein’s The Moon is a Harsh Mistress. A classic.)

The Chinese will probably talk the claptrap of humanity exploring the cosmos, the expansion of the frontiers of knowledge for all, blah, blah, blah. Unlike us, they aren’t stupid enough to believe in that stuff. They will do what is good for China, which means what is bad for China’s enemies, especially us. That’s what I’d do if I were them, and I don’t hold it against them and I’d expect no less.

How do say Jacksonian in Chinese?