The Cost Of Bad Foreign Policy

Before I go into any of this, I want to make one thing clear. I am not in favor of going to war with Iran. Despite the fact that American troops have been fighting Iran in Iraq and Afghanistan for more than ten years now, I have no desire at all to attack Iran. Any American attack on Iran would result in an Iranian attack on Israel (probably chemical or nuclear in nature) and totally end any semblance of stability in the Middle East. However, I am totally opposed to the recent agreement reached between America and Iran in regard to Iran becoming a nuclear power (Iran says that in the recent agreement, the world community gave Iran permission to become a nuclear power; the world community says it did not give that permission).

I am not the only one concerned about the agreement. Yesterday Bret Stephens posted an article at the Wall Street Journal regarding the recent agreement reached with Iran.

Mr. Stephens cites two recent peace agreements that were questionable at best–Munich and the Paris Peace Accords in January 1973. Both agreements seemingly brought peace and both lead the way to horrible atrocities–the attempted Nazi takeover of Europe and the killing fields of Cambodia.

Mr. Stephens points out that although the agreement signed in Geneva on Sunday brings temporary peace as did Munich and Paris, it has no redeeming qualities.

The article points out:

And each deal was a prelude to worse. After Munich came the conquest of Czechoslovakia, the Nazi-Soviet pact and World War II. After Paris came the fall of Saigon and Phnom Penh and the humiliating exit from the embassy rooftop. After Geneva there will come a new, chaotic Mideast reality in which the United States will lose leverage over enemies and friends alike.

What will that look like? Iran will gradually shake free of sanctions and glide into a zone of nuclear ambiguity that will keep its adversaries guessing until it opts to make its capabilities known. Saudi Arabia will move swiftly to acquire a nuclear deterrent from its clients in Islamabad; Saudi billionaire Prince Alwaleed bin Talal made that clear to the Journal last week when he indiscreetly discussed “the arrangement with Pakistan.” Egypt is beginning to ponder a nuclear option of its own while drawing closer to a security alliance with Russia.

The economic sanctions on Iran were working–the Iranian economy was rapidly shrinking. That is why Iran was willing to negotiate. Had the economy continued to shrink, we might have seen the end of the tyrannical rule of the Ayatollahs. Instead, we will see an end to the sanctions and a strengthening of the hold the Islamic fanatics have on the country of Iran.

Unfortunately, we have messed this up royally, and we will be the ones to pay the price.

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The Real Cost Of The 2012 Election

On November 27, the Asian Times posted an article entitled, “Post-US world born in Phnom Penh.” The article reports something not widely reported in the American media:

President Barack Obama attended the summit to sell a US-based Trans-Pacific Partnership excluding China. He didn’t. The American led-partnership became a party to which no-one came.

Instead, the Association of Southeast Asian Nations, plus China, India, Japan, South Korea, Australia and New Zealand, will form a club and leave out the United States. As 3 billion Asians become prosperous, interest fades in the prospective contribution of 300 million Americans – especially when those Americans decline to take risks on new technologies. America’s great economic strength, namely its capacity to innovate, exists mainly in memory four years after the 2008 economic crisis.

The article includes a number of charts detailing the decline of American economic influence. The first chart explains what is happening:

Asian, European and US exports

It is hard to fathom just what President Obama had in mind when he arrived in Asia bearing a Trans-Pacific Partnership designed to keep China out. What does the United States have to offer Asians?

  • It is borrowing $600 billion a year from the rest of the world to finance a $1.2 trillion government debt, most prominently from Japan (China has been a net seller of Treasury securities during the past year).
  • It is a taker of capital rather than a provider of capital.
  • It is a major import market but rapidly diminishing in relative importance as intra-Asian trade expands far more rapidly than trade with the United States.
  • And America’s strength as an innovator and incubator of entrepreneurs has diminished drastically since the 2008 crisis, no thanks to the Obama administration, which imposed a steep task on start-up businesses in the form of its healthcare program. Washington might want to pivot towards Asia. At Phnom Penh, though, Asian leaders in effect invited Obama to pivot the full 360 degrees and go home.

The arrogance of the Obama Administration is part of the problem. After over-regulating small business, driving up the national debt, and increasing borrowing from China, what did President Obama think he had to offer? The results of President Obama’s Asian trip are proof that America’s influence in the world is waning (as charged by Governor Romney during the Presidential campaign). The question becomes, “Is this important; and if it is, what are we going to do about it?”

 

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