Diatribes of Jay

This is a blog of essays on public policy. It shuns ideology and applies facts, logic and math to economic, social and political problems. It has a subject-matter index, a list of recent posts, and permalinks at the ends of posts. Comments are moderated and may take time to appear. Note: Profile updated 4/7/12

15 October 2012

Worst-Case Mitt

[For my recent post on the GOP’s “chutzpah” campaign and how to beat it, click here.]

As the election gets ever closer, Mitt Romney will “pivot” ever further, trying to seem ever more moderate, and making as if to throw the Tea Party under the bus. In so doing he will try to validate a “narrative” (how I hate that word!) that clever GOP faithful have been telling for several months.

According to this “narrative,” Mitt is not nearly as extreme as he’s had to portray himself in order to win the GOP nomination. He’s really a smart and pragmatic man, who will do whatever is necessary to make our country “win,” just as he “won” personally in making himself very rich.

He’s a football coach whose recent history of extremism is best forgotten. But just like convicted child-abuser Jerry Sandusky, he knows how to win. His personal politics are not really all that different from the President’s; he just puts a bit more emphasis on private industry and fossil fuels.

And as for the Tea Party, don’t worry about them. They’re just pawns—Lenin’s “useful idiots,” but on the right. Once the GOP has won the big prize, the people who really control it, and who created the Tea Party out of nothing, will let it rot because they have the money and power and the Tea Party pawns don’t.

That’s not a pretty picture, and it certainly doesn’t much resemble the democracy our high-school civics courses used to teach us. But as Pablo Picasso once said about being 90 years old, it’s a lot better than the alternatives.

That’s best-case Mitt.

No rational person, however, decides by looking at just the best case. That would be one-sided. What about the worst case?

Here’s what I think could realistically happen if Romney takes over next January and does what he promised or implied he would do. This “narrative” of my own requires only a few plausible assumptions, all of which are realistic. They are, in fact, much more probable, based on current events, than were the Soviet Union’s fall in 1991, 9/11 and our two needless wars in 1999 (when the Monica Lewinsky scandal was foremost in our minds), and the Crash of 2008 in innocent, partying 2005.

January 2013. Romney takes office as president. In his first week, he declares China a currency manipulator and begins to apply trade sanctions.

In response the Chinese do three things. First they redouble their efforts, already under way, to strengthen trade ties with Europe, India, Russia and the rest of the developing world. Chinese leaders issue secret orders to their giant state enterprises and private trade associations to de-emphasize trade with the US and build up other ties.

Second, the Chinese redouble efforts to encourage domestic consumption in China, which have been a key part of China’s most recent five-year plan and will undoubtedly be an even more important part of the next two. As a result, Chinese exports decrease, but so do Chinese imports from the US. Brazil, Britain, France and Germany start to see their trade balance improve; ours takes a dive.

Internally, Chinese leaders point out that we Yanks have less than 5% of the world’s population, and that lots of other people are eager to buy cheap Chinese products, whose quality is improving as rapidly as Japan’s quality did a few decades before.

Third, the Chinese begin to unwind their huge position in US treasuries. They do so slowly and as discreetly as possible, so as not to startle anyone or cause a panic.

Chinese leaders speak obliquely about “diversification” of China’s huge foreign reserves. The ultimate result is to weaken our currency against China’s—thus realizing in part our goal of making our currency cheaper. But China’s move also boosts interests rates here, making it harder to pay off our debt and sparking inflation.

February 2013. With Congress still in massive gridlock, our nation has already jumped off the “fiscal cliff.” But President Romney promises a parachute. He assures a nervous nation, and even more nervous global bond markets, that he has a plan to limit the damage.

His plan goes nowhere. The Tea Partiers in the House, who also haven’t gone anywhere, haven’t forgotten the sting of being thrown under the GOP bus and ignored in January. The Democrats, still smarting from the outrageous lies and blame that cost them the election, have a majority in the Senate, or at worst a sure-thing filibuster. They are in no mood to compromise or deal. They are even less inclined to start walking down a road toward privatizing Medicare and Social Security, a path that Romney demands as a condition for a solution.

With all his trademark self-confidence, and still in his first flush of triumph from the election, Romney assures a frightened nation that he’s a smart, bipartisan guy who will cut a deal, which will (among other things) make Medicare and Social Security solvent as he sees it.

Somehow, with Congress ever more rancorous, weeks turn into months and no deal appears.

Is that kind of gridlock so hard to imagine?

If Mitt behaves as described—an outcome consistent with both best-case and worst-case Mitt—the Tea Party and Democrats will both hate him, or at least will have little incentive for reasoned compromise. Then he will have to rely on a vanishing breed of Republican moderates like his alleged self to pass laws. Good luck!

April 2013. No fiscal-cliff remedy is yet in sight. The nation is tipping into recession, and the ground is coming up rapidly.

On April 15, our tax day, two of the three private rating agencies, under pressure from global financial leaders (including the IMF and World Bank that we started), downgrade America’s bonds and Treasury bills. Overnight, interest rates start to rise. Businesses raise prices to take up the slack of increased cost of capital, and unions (what’s left of them) gird themselves for hard bargaining over wages. The nation’s recession steepens, and inflation beckons. “Stagflation” is just months away.

July 2013. All this time, Benjamin “Bibi” Netanyahu has been waiting patiently for President Romney to make good on his implicit campaign promises. There is now ambiguous evidence of Iran’s efforts to enrich uranium past 20%, all that’s needed for power plants. The Israeli and American right wings are calling for Iranian blood. Bibi comes to the UN and goes on global TV, declaring that Iran has crossed the “red line.”

After two weeks in crisis mode, the Israelis and Americans launch a strike on Iran’s nuclear facilities on July 16, 2013. The American part in the raid is top secret and vehemently denied by the White House and Pentagon.

But American participation is planned and thorough. Israeli bombers carry our biggest bunker-busting bombs, which Israel doesn’t have. All of our “stealth” aircraft except vital reserves participate in the raid, flying from and returning to American bases in secret. Our carriers and submarines offshore launch conventional (non-nuclear) cruise missiles in quantity, and American aerial refueling and AWACs planes provide logistical and strategic support for both American and Israeli forces.

Of course joint Israeli and American intelligence leaders fix the targets and decide precisely where to drop the bombs. Our leaders’ denials fool no one.

The raids take place in a single twenty-four hour period. American and Israeli officials describe them cautiously as effective. They display video clips from planes, satellites and drones, showing big holes in the ground and things blowing up.

The next day, Hezbollah (from Lebanon) and Hamas (from Gaza) launch massive rocket and missile attacks on Israel. As Iranian missiles and bombs fall on Haifa, Jerusalem and Tel Aviv, Iran announces to a shocked world that the Straits of Hormuz have already been mined, with remotely activated devices surreptitiously installed earlier.

American and Israeli officials downplay the threat. But soon TV images around the globe show blazing and sinking oil supertankers, and burning crews fleeing. In addition to previously installed and remotely activated mines, small, fast Iranian craft, somewhat like PT boats, are making shipping in the Straits hazardous.

August 2013. Joint NATO, Israeli and “coalition of the willing” naval forces make short work of Iran’s navy, at least what parts of it can be found. But small, fast boats camouflaged in tunnels, coves and inlets continue to harass oil traffic in the Straits. Often they act like Al Qaeda suicide bombers, or Japanese “kamizake” pilots from days of yore. Their crews’ dying eyes see huge conflagrations of oil, and they go to their watery graves believing they will see Paradise as “martyrs.”

As a military exercise the year before suggested, NATO and allied forces are effective in clearing only about half the Iranian mines. Oil cargoes continue to go up in spectacular flames, as broadcast nightly on global TV.

The insurance markets panic. Fearing bankruptcy, Lloyds of London announces a moratorium on insurance for shippers through the Straits.

In mid-August, with 10% of global oil flow disrupted (half the Straits’ pre-conflict capacity) the price of oil reaches $200 a barrel. The global economy teeters on the brink of a second Great Depression, which will surely come if things don’t get fixed soon.

Iran’s patron Russia announces that it will permit foreign naval convoys in international waters but will henceforth help defend Iran against any direct attacks on its territory. It hints vaguely about its nuclear deterrent, and it sends nuclear submarines into the Gulf, armed with conventional ballistic, cruise missiles and ground-to-air missiles.

The day after this announcement, Iran launches devastating conventional air, missile and drone attacks on Israel, with assistance from Hamas and Hezbollah. Israeli civilian casualties are in the tens of thousands.

Israel is left with the choice of licking its wounds or risking, at best, a limited war with Russia. The US and NATO face the same choice. The fate of the Middle East, the global economy, and perhaps humanity rests in Bibi Netanyahu’s hands and the hands of a US President who, until the last seven months, never had any direct foreign-policy or military experience at all.

* * *

I’ll stop here for now. I won’t mention the very real possibility of this kind of scenario spiraling into the global nuclear holocaust that cooler heads in the US and Soviet Union avoided in October 1962.

That disaster, of course, now seems remote. But it would seem a lot less remote if a much more plausible scenario like this played out.

Our realistic scenario illustrates two basic truths that every American who lived through the last twelve years should know. First, the best laid plans of mice and men—especially military plans—“gang aft aglee.” Second, unless your enemy is a basket case like Qaddafi, wars are much easier to get into than out of.

So before you pull the lever for Mitt, think of this chain of events—one of several possible worst cases—along with the more pleasant possibility of Mitt turning out to be Jon Huntsman, Jr., in disguise. (And recall that Huntsman himself had seven years of real foreign-policy experience, plus six years of international business experience.)



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