Friday, February 16, 2007

The End Of The Bubble

I talked yesterday about how the tactics being applied in Iraq, ie. Clear and Move On, will become America's regional strategy in the event of a war with Iran. All it takes is a look at the ways in which the geo-political landscape has been altered over the past six years to understand why it won't work.

In January 2001, the United States was an often resented, but widely admired and respected superpower wielding a historically unprecedented global influence. Rightly or wrongly, we occupied a perceived position of moral leadership among the global community, which when coupled with our economic, diplomatic and military power made our involvement decisive in every continent.

Russia was too busy shaking down the oligarchs who had made off with all of the Soviet Union's industrial infrastructure and most of the Western world's capital infusion to spend much time on projecting its power abroad. China, while a looming economic giant, seemed fatally compromised by its abysmal human rights record to ever be more than a regional power. Chavez had his hands full holding onto power in Venezuela. And Iran was constrained to the role of regional troublemaker and spoiler in the Middle East.

If America faced a potential threat to its position of global hegemon, it was the prospect of an increasingly integrated and assertive European Union trying to contest it on the international stage.

Fast forward six years to January 2007. On nearly every count, American influence has diminished, often dramatically. Indeed, we are significantly more greatly resented, and less widely admired and respected. Our legitimacy as moral arbiter has been compromised, perhaps irrevocably, by the human rights abuses carried out in the name of the War on Terror. Our military deterrent capacity has been overburdened by our force commitment in Iraq. And as a combined result of all of these factors, our diplomatic influence has suffered.

Meanwhile, Russia has taken advantage of its increased energy revenues to modernize its military production capacity. It has strategically triangulated our two regional nemeses, Iran & Venezuela, providing nuclear energy technology to Iran and weapons to both. It has courted India, and more recently the Gulf Arab states, to develop natural gas and nuclear energy partnerships. And it is pursuing a strategic realignment with India and China (countries that between them combine 40% of the world's population, 20% of its economy, and 50% of its nuclear warheads) that could tectonically shift the global balance of power.

China has converted its trade surplus into cash reserves, with which it buys influence among second-tier energy and natural resource-producing countries to solidify its strategic position. With America increasingly directing its attention to its Middle East debacle, its Asian neighbors have begun to hedge their bets with closer economic ties to Peking.

An increasingly bellicose Venezuela has used its oil revenues to extend its influence throughout Latin America, and has now been joined by Bolivia, to a lesser extent Ecuador, and most recently Nicaragua in adopting a throwback statist approach to the impact of globalization.

In fact, among all of our potential rivals on the global stage, only Europe, whose interests most closely converge with our own, has seen its influence decline, due to internal divisions over the Iraq War, disaccord over continued political integration, and an obstinate refusal to invest in the kind of military capacity that might allow it to project its global influence more muscularly.

In other words, the circumstances that permitted the kind of unilateral stubbornness of purpose that led to the American invasion of Iraq no longer exist. We have fewer and weaker allies, more counterweights to our power, and fewer resources at our disposal. Although we probably would be able to manage the regional consequences of a military confrontation with Iran alone, there are no guarantees that our rivals would not get involved, and some likelihood that they would.

Russia, which is very heavily invested in Iran as a regional trading partner and potential energy ally, has already hurriedly delivered a shipment of air defense missiles to the Iranian military to defend its nuclear installations in the event of attack. While it's doubtful they would openly intervene in the event of a conflict, they would have a vested interest in providing the Iranians with as much covert assistance as possible to thwart our plans and bleed our efforts. Should they choose to do so, it would probably be with the tacit approval of the Chinese. In which case, any conflict with Iran would be long, costly, and constant. In other words, the kind of conflict we can no longer afford.

America's global influence peaked in the immediate aftermath of the invasion of Afghanistan, when the world's outpouring of solidarity following September 11, coupled with the impressive and rapid defeat of the Taliban, gave America a political capital that amounted to a golden opportunity for leadership. A political capital that the Bush administration squandered in Iraq.

An indication of the extent to which our influence has been reduced is the recent wave of sabre-rattling threats towards Iran, which brought little more than scorn, skepticism and dismay, both domestically and abroad. Yet just like a company, overvalued by a speculative bubble, that continues to aggressively pursue mergers in the face of declining market fundamentals, the very decision to wave the sabres shows the extent to which the Bush administration is oblivious to the market correction that has already taken place.

America could still find a way to bring the Iraq catastrophe in for a soft landing. But an invasion of Iran would signal the end of the bubble. And we've seen how that works.

Posted by Judah in:  China   Foreign Policy   International Relations   Iran   Iraq   Russia   

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