Irregular Challenges and the Emerging Defense Debate
I attended a very interesting "Meeting America's Security Challenges After Iraq" conference at RAND Washington yesterday. This brought together the flower of the DC wonkocracy/punditocracy (plus me). There were 50-60 total participants. It's very likely that a number of future senior OSD people were there. The CJCS and VJCS each spent an hour with us; there were at least four other 4 stars and five or six 3 stars in attendance. So many 2 stars and 1 stars that some of them had to sit in the back of the room with note takers. The vast majority were Air Force with a sprinkling of Marines (and I hesitate to use the words "Marines" and "sprinkle" in the same sentence).
This was sponsored by Project Air Force at RAND and the Center for Naval Analysis. There were a number of great presentations by people like Frank Hoffman, Bruce Hoffman, Andy Krepinevich, etc. Two take aways: 1) there was an amazing panel on the defense budget led by Ken Krieg. It's chilling just how big the gap is between the services' projected future budgets and every realistic projection on likely budgets. Even simply cutting top acquisition programs wouldn't fix this. The most frightening drop off is in R&D. 2) We are going to see mounting debate (probably AFTER the presidential election) as to whether we should sustain a grand strategy focused on "irregular stuff" or move toward what strategists call an "offshore balancing" strategy where we may intervene in failed states with nukes or oil, but we don't hang around to try and re-engineer them.
Of course, this effort is led to some extent by the Navy, but more by the Air Force. I'm an Army guy but I'm also a Republican with libertarian leanings, and I can't say that I find this idea a bad one. It's clear that right now we have a classic and debilitating means/ends mismatch in our strategy. Our strategic objective is stabilizing and re-engineering Islamic states, but we don't have even the military to do that, much less the other government capabilities. A few people like my friend Tom Donnelly are arguing that we need a massive capability increase. I really think that's unlikely and it's much more probable that we'll simply adjust our strategy and get out of the business of re-engineering other nations.
There are interesting political dynamics in this debate. The political right is still largely behind President Bush's strategy which focuses us on irregular challenges. But I'd have to think the China focus of the "off shore balancing" strategy would resonate with some. I'm not getting a sense of where Democrats fall on this. About the only consistent theme I'm hearing there is that we need more emphasis on training/advising, and working with allies. That doesn't address the big question: what do you do if prevention and multilateral approaches fail? Do you intervene unilaterally or near-unilaterally and attempt to re-engineer, or do you contain and cauterize?
Anyhow, I'm sure you'll hear MUCH more on this during the next five years.
Nota bene: that was my first exposure to the Chief and the Vice. I was very impressed. Best top team we've had for a long time in my estimation.
Other nota bene: leaving a motorpool car in the Pentagon City parking garage at 0730 does not guarantee you can find it at 1900. There's 45 minutes of my life I'll never get back. I did succeed in setting off the panic alarm in it, but it took me another 15 minutes to figure out what level it was on (while it merrily honked away).
I don't understand the foreign investors...
Quote:
Originally Posted by
tequila
Being the world's reserve currency gives the U.S. the biggest credit card account in the world.
Of course we've been running it up mercilessly in the past 8 years, and the creditors are getting a wee bit nervous, hence the steady and accelerating decline in the value of the USD over the same time period.
It is not written in stone anywhere that the US Dollar must be the world reserve currency. It replaced the British Pound. It will be replaced, itself, if current trends are not reversed. THEN, things will get interesting. Some states have already broken the dollar peg.
Presidential candidates are trampling around the cornfields of Iowa, and through the snows of New Hampshire. You might think they would be talking about the credit crunch and subrime loan fiasco, and what has happened to the dollar. But no.
It really boggles my mind why the foreigners continue to lend to the U.S. government on the terms that they do. I know I wouldn't. I'd be on a buyer's strike.
Things are going to get interesting. We already have a president (and a Republican one at that) wanting to rewrite mortgage contracts. I eagerly await the next chapters in this drama as it unfolds.
Snow in the mountains, folks down in the valleys unconcerned.
That is a standard answer to the question of why the foreigners do this. "What else are they gonna do with their money? They just HAVE to buy U.S. bonds. Boy, don't we have them boxed in. He! He! He!" We shall see. It is just economic intertia, the natural coninutation of an unbalanced economic policy until it blows up on somebody.
This state of affairs continues at the moment because of their desire for "stability." Because no dollar crisis has erupted, it is assumed by the government that this can just continue forever. Taking preventative measures would likely cause some pain, and better to shift that onto the next guy who follows along, if it is in fact, needed at all.
Allow me to use an analogy here. Picture a tranquil Alpine setting. All the towns and villages are down in the valley. Snow keeps falling and falling in the mountains in the higher elevations. Alert people down below are nervous about this and warn of a massive avalanche if things continue at this rate. They are scoffed at by the others, "Don't you see it is different this time because (fill in your own explanation)."
And everyone goes about their business. Intrepid weathermen have attempted to climb up higher to measure the snowpack to try to measure how much can be accumulated before the avalanche triggers, but even they admit that this is impossible because there are too many variables and unknowns involved to confidently predict the breaking point.
But from merely looking at historical examples, they know such a point exists, and we are past points where it has occured in recorded history. Down in the valley, it all seems great... except for these annoying, irritating worry-wart weathermen who seem to be crying wolf all the time about the record snowfalls up in the mountains.
Doesn't this end in a dollar crisis? And then the Federal Reserve has to either allow the value of the dollar to crash (further at this point) against foreign currencies and gold, or ratchet up interest rates to very high levels to defend the value of the currency? Pick your poison, so to speak. That's where these sort of circumstances always led in all the economic classes I ever took.
The crazy thing is that we have seen this movie before in the runup to the collapse of the Bretton Woods system. Hello 1970s all over again? I didn't particularly like that decade the first time around. I'll like it even less if we experience a rerun. But is that not where this is headed, ceteris paribus?