Bush Foreign Policy and the Failing Stock
Market
by Jon Basil Utley
7/16/02
Unending war, sacrificing free trade, breaking with Europe and telling
allies to shove it, spending his time on planning a new war, neglecting
domestic issues, foreign policy made by the Christian Right and Israeli
Lobby, disaffecting his Republican base, fumbling the battle against
terrorism, and more. No wonder the stock market is afraid. World
prosperity is necessary for American prosperity and history teaches that
wars have always drive the market lower.
A former Reaganaut warns, "The way things are going, it will soon be the
United States against the world." That comment, by a top political leader
in Kuala Lumpur, was just one of hundreds of expressions of a new and
disturbing alienation from America that I heard during a recent swing
through 14 Asian, European and Latin American capitals.
What a contrast to the supportive attitudes abroad immediately after
Sept. 11! Then, the sometimes anti-American French journal Le Monde
captured the world's sentiment with a headline proclaiming: "We are all
Americans." Ten months later, sympathy for the victims of the terror
attacks remains. However, the American image is increasingly perceived
as ugly, and support abroad for U.S. policies is plummeting.
Bush's speech at West Point that threatened dozens of nations with
American bombing attacks totally ignores what such threats mean to
world trade. This threat could make American civilians overseas counter
targets of terrorists all over the world. Already the jokes are beginning
about President Bush appalling ignorance of the world. He allegedly told
Tony Blair that he now knew the reason the French economy did not do
better: the French language lacks a word for "entrepreneur."
Moreover, columnist Paul Craig Roberts warns, "It is absurd for the Bush
Administration to spend so much time on Afghanistan, Palestine and Iraq
when its position in the world rests much more on its stock market than
on its armaments…....Today, Washington is focused on wasting resources
on wars….."
New enemies are being created. Foreign Affairs (July-August 2002 –
"Is Southeast Asia the Second Front?") John Gershman) warns that “a
military approach to the region’s problems could weaken local
democracies and turn neutral forces into new enemies.” Such policies are
reinforced by the Arms Lobby Christian Right Armageddonites, and the
Israeli Lobby which together seem to make foreign policy. Meanwhile
China is on notice that it may be our next target under the Wolfowitz
Doctrine. The Defense Department Deputy Secretary, who now appears
as the main spokesman for Bush foreign policy, argues that no other
major regional power may be permitted to arise. Thus, we are on the
verge of making China into an enemy as well as much of the Muslim
world.
Fortune Magazine warns that the market is nervous about a Bush attack
on Iraq, specifically because there is no rational thinking or discussion in
Washington about the post-"victory" consequences. For Bush's worldly
advisor Dick Cheney that is nothing new. Twelve years ago, before the
first attack on Iraq he was asked, "What will we do after we win?" His
answer – "Well, I don't know, we haven't thought much about that." Well
the stock market is thinking about it. The unknowns include possible
destruction of oil production, further alienation of other Muslims by
killing tens of thousands more Iraqis, possible overthrow of the Saudi
government and other chaos.
The greatest threat is the collapsing consensus in Washington for free
trade. Bush steel tariffs and his complementary caving in to new
agricultural subsidies are serious threats against international trade.
These policies weaken the pro free trade constituency. In response to
these policies, Europeans have threatened reprisal tariffs. Supply side
guru Jude Wanniski made his first mark as a young economist
researching how the stock market crash of 1929 came about the day after
the coalition to block the Smoot Hawley tariff fell apart in Congress.
The President, like his father before him, is so preoccupied with war and
foreign interventions that he and his top staff are neglecting vital
domestic policy battles, and scaring the American public in the process.
Fortune Magazine foresaw that threat last October:
"A Fortress America mentality in security matters could spill into
economic ones...a short hop from nationalism to protectionism...all
sorts of parochial interests in the U.S. are much more likely to get the
upper hand."
Bush's call for a Homeland Defense reorganization of tens of thousands
of government workers may bring chaos to the functioning of many
government bureaus; a fear of many businesses which depend upon
smooth functioning, e.g. customs procedures. This impending dilemma is
analyzed in the Washington Post.
The Bush White House is noted for its "go it alone" foreign policy with no
considerations for our Allies on issues such as trade, attacking Iraq, the
World Court and so on. Powell, the only Administration counter weight,
has caved in to the Neo-conservative "empire hawks." World markets
have responded by selling off dollars and buying Euros, another major
reason for declining stocks. Every time Bush makes a speech on the
stock market, stocks drop further. Monday's big crash was the final
warning. War is bad for the stock market and unending war is worse. But
making war can be exciting and almost addictive for those who don't
suffer from it. Bush is so keen to launch a new war (on Iraq) that he
neglects what is vital here at home. Markets can recover from an Enron
or a WorldCom, but not from catastrophic foreign policies. |
