jim writes:

"Bush's Dream, America's Nightmare"

Jamal Mecklai



Having lived in -- and loved -- America for fifteen years, I have often found myself a lonely apologist as people everywhere made fun of America's shallow culture and shockingly thin knowledge levels, and were angered by its arrogant (and often violent) posturing in world affairs. Of course, since America was the worlds biggest market, since it had the best universities and made the best movies, most of the criticism was easy to deflect, since everybody -- or almost everybody -- also had a vested interest in the American dream.



The Bush government's immoral and illegal assault on Iraq this week has tormented me, more even that the attack on the World Trade Centers, since it has compelled me to confront the fact that a country I love(d) could pillage and rape in this manner. Mr. Bush, a weak-minded non-entity, who was elected President by a razzle-dazzle sleight of ballot box in Florida, and who?s presidency is being run by a group of angry, personally impotent corporate criminals, has turned today's America into a loud image of the kind of regime it professes to want to change. To quote James Baker, who was U.S. Secretary of State under Mr. Bush's Daddy and during the 1991 Gulf War:



"How can an ethnically diverse totalitarian state that terrorizes its people, develops horrible weapons and dreams of conquest be transformed into a peaceful, stable, humane and prosperous member of the international community?"



While Mr. Baker was speaking about Iraq, his words apply equally well -- even better -- to the United States today. Even before last week, dissent has barely been tolerated in the U.S., armed soldiers patrol the subways in New York, and the government keeps the people terrified with pathetic advice to "duck and cover" and keep three days' worth of water and food as emergency supplies. The U.S. is the grand-daddy of "weapons of mass destruction", and, unlike other countries, has no shyness is using them -- look at what's happening in Iraq. As to dreams of conquest, a September 2000 report put out by The Project for the new American Century, which has, amongst its founder members such stalwarts as Vice President Dick Cheney, Defense Secretary Donald Rumsfeld, Dubya's brother, Jeb, and several other angry right wing fundamentalists, says it plainly: "Our goal is not combating a rival, but maintaining our imperial position."



However, as is loudly apparent from the huge amount of protest both within and outside the United States, this imperial strategy will not wash. In some senses, this articulation itself is evidence of the decline of American civilization (such as it is) from the ascendancy it enjoyed since the 1950's. And, as always, the seed of the decline lies within the host. Already, several thousand people have been arrested in the United States for protesting against the government's actions -- shades of Saddam. Reportedly an American soldier in Iraq turned his weapons on his own contemporaries. The global anti-war movement is gathering momentum even as we speak.



Mr. Bush?s dream -- America's nightmare -- is over. By pushing the worst of America's attributes beyond any comprehensible limit, Mr. Bush has succeeded in uniting some 4.8 billion people -- over 95% of the world's population, and including, already, almost half of the population of the United States -- against him.



So, when the shooting stops -- and despite the tragic cynics who believe "to the victor go the spoils" -- things will be different. Completely different.



First of all, Americans will be both frightened and embarrassed to travel overseas. Even before the war, a couple of American kids I know, who were travelling in Europe said they were amazed at how much anti-Americanism they had to face. The few Americans I know in Mumbai are horrified; some, in the U.S. Foreign Service, embarrassed to meet friends.



Business trips by U.S. executives will reduce in frequency -- the vaunted BPO sector will have to take cognizance of this. Chances are it will put pressure on the smaller players and provide better margins to the bigger players, who have well-established relationships. Travel and tourism sectors that depend on America will feel the heat -- look for a cheaper, less crowded Europe this summer; the Caribbean and Mexico will have to do with fewer tourist dollars. Conceivably, the already wobbling economies of Argentina, Brazil and Venezuela will totter further, perhaps creating a domino effect into other emerging markets.



But the biggest hit of all will be to the dollar. The world has been financing America's nature, which, till now, has been to live beyond its means. Foreigners hold a large part of the U.S. national debt -- China and Japan, between them, hold over $500 billion of U.S. government securities. In addition to a huge national debt, the U.S. has a humongous (and growing) annual budget deficit -- around $500 billion this year. Foreigners investing in the U.S. (whether in financial or other assets) finance this deficit.



Well, that tap is going to dry up. I mean, are you going to put your money in a country run by a bunch of imperialist -- and paranoid -- thugs? Might as well give it to Saddam.



Even if all money managers do not share this characterization, the likely instability in the U.S. as a result of the Iraq invasion will certainly drive prudent investors to reduce their exposure to U.S. assets. Even a negative trickly of capital outflow will, in the current market environment, turn into a flood which will push the dollar down dramatically. The U.S. Fed will be driven to raise short-term interest rates to prevent the dollar's decline from turning into a rout. Operationally, there will be a period of huge volatility, as the markets will test the Fed by pushing the dollar below certain random benchmarks -- 1.10 (to the Euro), then, perhaps, 1.15, and so on -- to see whether the Fed picks the dollar (to protect) or the economy and jobs. This volatility itself will make investment decisions more difficult, delaying even further any recovery in the economy.



So Bully Boy Bush's victory march will end in economic tears, irrespective of the expected boost from the rebuilding of Iraq, contracts for which have reportedly been wink-winked to the back room gang already.



Switzerland will benefit greatly -- buy Swiss francs. China will play a significant role. Already, it is the U.S.' largest current account creditor, and, while it needs U.S. markets, the Chinese have always been way ahead of anyone politically. They have made the world come to them, holding the promise of their 1 billion strong market close to their chest. And make no mistake, the Chinese, whose response to the invasion of Iraq was the sharpest of any country, have always had global political ambitions.



As the protest swells, and perhaps as early as the end of 2003, when the U.S. Presidential election, of which the Iraq war was intended to be a key part, gets in full swing, Mr. Bush will be reduced to Nixonian mutterings in the Oval Office. While I don't think a chastened America will have the stomach for a full impeachment, it is clear that Bush will -- like LBJ at the end of the Vietnam war -- stand down from re-election. And return America to the people.



Maybe then, I will be happy again.