Yes, the U.S. Could Be Drawn Into Yet Another Big War

The tragedy of the Iraq invasion has done little to alter the factors that have led American leaders and the public into unwise military adventures

Sixteen years ago this week, the George W. Bush administration sent U.S. forces crashing into Iraq without a real plan for what to do after defeating Saddam Hussein. It is easy to forget that moment’s fervent convictions about the Iraqi dictator’s supposed weapons of mass destruction and links to al Qaeda—and the calamity into which Iraq soon descended. It all seems to belong to another era. The debate today is more about how we got out of Iraq than how we got in.

The idea that the U.S. would do anything like Iraq again feels ridiculous. We appear to have learned our lesson, and America’s political climate hardly seems primed for new military adventures. No imminent threat demands a response. President Donald Trump arrived in office determined to reduce U.S. commitments abroad, not to multiply them. He is aiming for a deal with North Korea, not war; pulling troops out of Syria and Afghanistan, not pushing more in.

But this picture bears a striking resemblance to the situation in the U.S. in the late 1990s. It was a time of domestic focus. Foreign policy had receded into the background, and no one was clamoring to invade and occupy far-off lands. In the charged atmosphere after 9/11, however, the national mood shifted dramatically. Looking back on the Iraq invasion, a key lesson is how easy it can be to tumble into a war that once seemed preposterous.

George H.W. Bush was the accidental catalyst that built the new Republican Party

It was a statement designed to jump-start budget talks that had been stalled for months. It did that and more, providing the catalyst that changed the Republican Party into an aggressive and hard-edge brand of conservatism that would hold sway for two decades.

The statement was a renunciation of one of the most famous campaign promises in modern American politics: Bush’s declaration of “no new taxes,” which he made as he accepted the Republican nomination in 1988. The pledge was a bow to conservatives, who always regarded him with suspicion, if not outright hostility. When he reneged on the promise, they exacted revenge.

.. As president, Bush proved that experience matters, that knowledge of the world is an asset, that careful and methodical can be more effective than big and bold, that responsibility to country takes precedence over loyalty to party, even if sometimes it comes at great cost, that compromise is not a dirty word.

..  If Reagan’s presidency hastened the end of the Cold War, it was left to Bush to manage the decline and fall of the Soviet empire and to do so safely and without bloodshed. He accomplished that with skill and strategy, aided by Secretary of State James A. Baker III, a longtime friend, and trusted national security adviser Brent Scowcroft.
.. After the war ended, with U.S. forces ordered to stop short of Baghdad, Bush’s approval rating soared close to 90 percent, scaring away veteran Democrats who were thinking of challenging him. Twenty-one months later, he was driven from office by the voters. A transition inside the Republican Party that was already underway accelerated.
.. Two years after that, the House was in Republican hands for the first time in 40 years, and the dominant figure in the party was House Speaker Newt Gingrich, who was the antithesis of the defeated president in so many ways. The party began to shift from a philosophy of smaller government to one of anti-government, particularly anti-Washington.
The statement that appeared on the bulletin board in the White House pressroom on that morning in June 1990 showed Bush to be a president who was prepared both to compromise with the Democrats, even if it meant breaking a campaign promise, for what he believed were the best interests of the country and to take personal responsibility for his actions.

.. The statement that appeared on the bulletin board in the White House pressroom on that morning in June 1990 showed Bush to be a president who was prepared both to compromise with the Democrats, even if it meant breaking a campaign promise, for what he believed were the best interests of the country and to take personal responsibility for his actions.

.. The conflicting interests of Bush and the Gingrich forces continued for the duration of Bush’s presidency. Gingrich’s wing saw conflict with the Democrats as essential to creating sharp differences between the parties; Bush saw cooperation with congressional Democrats in the name of effective governing as essential for the country and, he hoped, for winning reelection as president. On that, he proved mistaken.

.. As other Republicans lamented the fall of a president whom they much admired, those in the forefront of creating the new Republican Party were relieved that Bush had been defeated.
.. Tom DeLay, who would become House majority whip, later told me of his feelings on the night Bush lost in 1992. “Oh, man, yeah, it was fabulous,” DeLay said in a 1995 interview. DeLay admitted then that he had feared that, if Bush were reelected, it would mean “another four years of misery” for House GOP conservatives. He acknowledged mixed feelings about seeing the White House fall into Democratic hands but added, “If we had another four years of this [Bush], we’d never take over the Congress.”
.. Bush’s eldest son, George W. Bush, sought to restore something of his father’s sensibility to the GOP when he ran for president in 2000 and won the White House as a “compassionate conservative.” But he could neither remake nor retrofit the party. Though he was more conservative than his father, he nonetheless drew the ire of those on the right on issues such as immigration and spending.
.. The end of George W. Bush’s presidency further accelerated the changes within the Republican coalition, including the rise of a tea party movement that brought an even more unyielding form of anti-government conservatism. Today President Trump is redefining the party in his own image, moving it ever further from the GOP over which George H.W. Bush presided.

From Economic Crisis to World War III

The response to the 2008 economic crisis has relied far too much on monetary stimulus, in the form of quantitative easing and near-zero (or even negative) interest rates, and included far too little structural reform. This means that the next crisis could come soon – and pave the way for a large-scale military conflict.

BEIJING – The next economic crisis is closer than you think. But what you should really worry about is what comes after: in the current social, political, and technological landscape, a prolonged economic crisis, combined with rising income inequality, could well escalate into a major global military conflict.

The 2008-09 global financial crisis almost bankrupted governments and caused systemic collapse. Policymakers managed to pull the global economy back from the brink, using massive monetary stimulus, including quantitative easing and near-zero (or even negative) interest rates.

But monetary stimulus is like an adrenaline shot to jump-start an arrested heart; it can revive the patient, but it does nothing to cure the disease. Treating a sick economy requires structural reforms, which can cover everything from financial and labor markets to tax systems, fertility patterns, and education policies.

Policymakers have utterly failed to pursue such reforms, despite promising to do so. Instead, they have remained preoccupied with politics. From Italy to Germany, forming and sustaining governments now seems to take more time than actual governing. And Greece, for example, has relied on money from international creditors to keep its head (barely) above water, rather than genuinely reforming its pension system or improving its business environment.

The lack of structural reform has meant that the unprecedented excess liquidity that central banks injected into their economies was not allocated to its most efficient uses. Instead, it raised global asset prices to levels even higher than those prevailing before 2008.

In the United States, housing prices are now 8% higher than they were at the peak of the property bubble in 2006, according to the property website Zillow. The price-to-earnings (CAPE) ratio, which measures whether stock-market prices are within a reasonable range, is now higher than it was both in 2008 and at the start of the Great Depression in 1929.

As monetary tightening reveals the vulnerabilities in the real economy, the collapse of asset-price bubbles will trigger another economic crisis – one that could be even more severe than the last, because we have built up a tolerance to our strongest macroeconomic medications. A decade of regular adrenaline shots, in the form of ultra-low interest rates and unconventional monetary policies, has severely depleted their power to stabilize and stimulate the economy.

If history is any guide, the consequences of this mistake could extend far beyond the economy. According to Harvard’s Benjamin Friedman, prolonged periods of economic distress have been characterized also by public antipathy toward minority groups or foreign countries – attitudes that can help to fuel unrest, terrorism, or even war.

For example, during the Great Depression, US President Herbert Hoover signed the 1930 Smoot-Hawley Tariff Act, intended to protect American workers and farmers from foreign competition. In the subsequent five years, global trade shrank by two-thirds. Within a decade, World War II had begun.

To be sure, WWII, like World War I, was caused by a multitude of factors; there is no standard path to war. But there is reason to believe that high levels of inequality can play a significant role in stoking conflict.

According to research by the economist Thomas Piketty, a spike in income inequality is often followed by a great crisis. Income inequality then declines for a while, before rising again, until a new peak – and a new disaster.

This is all the more worrying in view of the numerous other factors stoking social unrest and diplomatic tension, including

  • technological disruption, a
  • record-breaking migration crisis,
  • anxiety over globalization,
  • political polarization, and
  • rising nationalism.

All are symptoms of failed policies that could turn out to be trigger points for a future crisis.

.. Voters have good reason to be frustrated, but the emotionally appealing populists to whom they are increasingly giving their support are offering ill-advised solutions that will only make matters worse. For example, despite the world’s unprecedented interconnectedness, multilateralism is increasingly being eschewed, as countries – most notably, Donald Trump’s US – pursue unilateral, isolationist policies. Meanwhile, proxy wars are raging in Syria and Yemen.

Against this background, we must take seriously the possibility that the next economic crisis could lead to a large-scale military confrontation. By the logicof the political scientist Samuel Huntington , considering such a scenario could help us avoid it, because it would force us to take action. In this case, the key will be for policymakers to pursue the structural reforms that they have long promised, while replacing finger-pointing and antagonism with a sensible and respectful global dialogue. The alternative may well be global conflagration.