Iran threatened to block it, but did not take such a stance. The U.S. warned that it would act to prevent any blockade. Given the vital interest involved, there can be no uncertainty. Were Iran actually to try to close off the Strait of Hormuz, the U.S. Navy would smash the attempted blockade.
I was referring to oil, which is also what you were referring to prior to this post. As for specific geological locations of international trade, I hadn't considered that. Ironically though, most people consider international trade to be horrible, and logically should be in favor of such trade routes being closed. However, as it relates to my anti-intervention policy, I don't know... I hadn't considered this. I'll have to think about it.
Political sentiment changes more rapidly than nation's interests change. Not surprisingly, even as the U.S. elected Democrats and Republicans during the Cold War, there was a great deal of continuity in U.S. foreign policy vis-a-vis the Soviet Union.
Actually, from the reading I have done about the cold war, it seems clear we didn't have a consistent policy at all. Many of the conflicts that started during that time, were situations created in many cases by us not having a consistent policy.
If you're suggesting military intervention should be a last resort, I agree. In most cases, many other diplomatic and other non-military approaches can be undertaken before military action becomes necessary. Non-military engagement via foreign aid, trade ties, etc., can and should be undertaken far more regularly.
No, I am suggesting that all action, non-military, diplomatic or otherwise, should be a last resort. For example, Iran. We shouldn't be having talks with Iran at all. The last 20 years should be proof that talking does nothing. We've talked, and talked, and talked, and talked, and golly.... we're still exactly where we were before. Same with North Korea. We've talked and talked and talked, and what a shock... 20 years later, we find out they were lying the entire time?
No, we should have more of the Bush system. We wait until we have absolutely no alternative but to take action. Then we go to them and say here's the deal... you do X, Y, and Z, or we smash you. Then they either do X Y and Z, or we smash them.
Going to Korea back in the 90s, and saying don't do this or else, and then they do it anyway and we do nothing, only makes us look like a paper tiger, and that virtually guarantees that they are going to force us to use force. See now, because we have babbled at them for 20 years and never done anything, now the *ONLY* way to make them see we're serious is to start dropping bombs. This is the natural result of 'blaw blaw' diplomacy for 20 years without backing it with action.
So no, ANY action AT ALL, should be the last resort, and when we do anything, we should go in 100%.
Of course there is risk. One of the lessons is that effective foreign policy needs a corresponding public relations strategy. That won't eliminate all such risk, but it can mitigate the risk. Although the toppling of the Allende regime, which was rapidly transforming itself into a dictatorship, was beneficial to U.S. interests, the U.S. did not directly topple the regime. It did threaten to cut aid for the anti-democratic policies that were being imposed and did not take a stance that the government should not be challenged by domestic elements (certain military officers) in Chile. Following the coup, it did not take a position that the Allende regime should be restored. Of course, when Allende committed suicide, that was not possible anyway.
And we should not threaten to cut aid either. Of course I would suggest we should be in the business of giving aid. But the problem with cutting aid is that, this just gives a dictatorship, or any socialist government, that ability to shift blame for bad policies.
I am skeptical of your claim it can mitigate risk.
If the series of events that had been underway in Chile during the early 1970s was underway today, the U.S. would have played an even lesser role. Were situations such as the Vietnam War or coup in Chile or civil war in Nicaragua to have unfolded today, the U.S. response would have been far more restrained than it was during the Cold War. During the Cold War, national security interests made it impossible for the U.S. to be indifferent to events such events. Today, that is not the case. There are no compelling interests that justify intervention in Syria.
The soviet union was ultimately done in by the complete failure that is all socialism. So I'm not sure it was necessary for us to be involved in preventing the spread of socialism.
My reference to Containment related to the narrower WMD issue. Iraq was clearly engaging in provocations. But post-Iraq war, it was revealed that the Containment regime had proved surprisingly effective. Iraq had not redeveloped WMD. Moreover, from a geopolitical standpoint, Iraq had been a counterweight to Iran. Following the war, Iran has been pursuing a course that is threatening to transform the region's balance of power. Iraq no longer serves as a counterweight.
I'm not convinced that Iraq was a counterweight to Iran after the end of the Iraq-Iran war. Clearly during the 80s it was, but I don't see that Iran was being held back during the 90s.
And again, with 20-20 hindsight, it's easy to say Iraq wasn't a threat. That doesn't change the fact that at the time, Iraq was a very real threat. It's not like if they were in fact developing dirty radioactive bombs to pass off to terrorist groups, that Iraq would have advertised it in the New York Times.
A president, or anyone really, can only go based on the information readily available, and that information suggested that Iraq was trying to develop such weapons, and was trying to gain a working relationship with terrorist groups. I don't know about you, but I don't want a president that is so pathetic, as to wait only until after a national danger physically happens, to react. We knew about Osama back in the 90s, and Clinton refused to do anything. We know about the Ayatollah Khomeini in the late 70s, and Carter refused to do anything. So 9/11 happens, and a 52 hostages are dragged through the streets of Tehran.
This is the natural result of waiting until something bad happens, because the intelligence could be wrong....
Resource nationalism is separate from nationalization. Resource nationalism means that countries will not engage in trade of resources on economic considerations alone. Resources will be used as a lever for advancing national interests regardless of market-based interests. Russia has used resource nationalism via suspension of natural gas transmission. China is engaging in it by reducing its export of rare earth minerals, even as a ready and growing global market exists for those minerals.
Russia is a bad example. They stopped piping the gas because a country the gas went through, was diverting the gas and not paying for it. That's a market system, granted run by the government, but it's no less a market system than you refusing to pay for your car and having it repo'd.
China is a slightly better example because they have a very large share of the market. But ironically, just like oil, if you refuse to sell, you'll just drive other people to produce more, or drive consumers to find alternatives.
Toyota finds alternative to rare earth metals for hybrids: report | Car Advice
As such, the market will naturally diversify sources of commodities, if someone tries to clamp down on the market. At some point China will lose it's monopoly power (unless it stops playing the market) and when that happens the market will drop to the competitive price, regardless of China.
Again, Venezuela tried that with oil, and it failed miserably. Why? Because when they cut production, that pushes up the price, which drive others to increase production. The market will always win out eventually.
Pre- and post-TARP developments tell the story. Stabilization only occurred months after TARP. A free fall was underway prior to TARP.
The free-fall was due to Sub-prime Mortgage Backed Securities, that had once (because of government) been considered 'safe', being considered unsafe. That fall was good and needed. The whole problem was people making bad loans and selling them. The reason they were able to sell these bad loans, was because people still considered them 'safe'. So those assets needed to be devalued, and that naturally caused a fall in the market.
The stabilization of those assets is not a good thing in my book. It means that poor people were taxed to pay rich people for bad assets. When stabilization means poor people paying rich, that's not a 'stabilization' I support.
We needed those assets to crash in value, to whatever the market value was. That would force people to consider what they were investing in more carefully, so that such a problem didn't happen again. Instead, we have merely made it safe to invest in bad assets again. And no amount of regulation is going to change that.
That's incorrect. Iceland nationalized most of its banking system.
When a bank in the US, crashes, the FDIC takes procession, and places it into receivership, where it is shut down and the assets sold off.
During this time, you could say the bank was nationalized because the FDIC is a government entity.
This is what happened in Iceland. It wasn't nationalized like the government owned and ran the banks, like India for example. It was nationalized in that it was assumed controlled by a government agency, where it was liquidated and run down.
That is because when Iceland's banks went spectacularly bust, instead of pouring in billions of taxpayers' money to shore them up, Iceland just closed them down.
Their debts were so huge that, in truth, the country had little choice. Nevertheless, it was a radical strategy. Iceland effectively said "stuff you" to the banks' creditors.
Foreign debts were written off - including $8bn (£4.9bn) of deposits from savers in the UK and Holland. "Bankrupting your way to recovery," it has been called.
Iceland's banking debt was actually far larger a portion of their GDP, than the bad debt of our banks compared to our GDP. So in many ways, the relative debt of Iceland was far greater, than here in the US.
Yet, instead of bailing them out, they simply shut them down.
Iceland's president is certainly convinced the strategy is working. Olafur Ragnar Grimsson reels off a series of impressive economic statistics when I meet him in his stark mansion on a forbidding spit of land jutting out into the bay outside Reykjavik.
He tells me how the economy is now growing faster than that of most other European countries and with a lower public sector deficit. Unemployment is falling and Iceland has just raised a billion dollars at favourable rates on the international market.
BBC News - Could Iceland be a model for debt-ridden Europe?
Yet instead of the economic doomsday predicted, Iceland is growing, and fast than most of Europe now who are still dealing with the crisis.
Ironically, this isn't the first time the strategy was tried and succeeded. In the 90s, Estonia adopted Milton Friedman's views, and among other reforms, like flat tax and free-markets, they also determined to allow banks to fail. Most of Europe and even Russia pressured Estonia to not allow their banking system to fail. But the president persisted, and a dozen of the largest banks went bankrupt. Since then Estonia became one of the three Baltic Tigers.
I see a pattern. What do you think?
