USA And The Future Of The World -II

[ramana]

<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Its is eight years since 9/11 attacks on continental US. In the following years a lot has changed and affected the US in many ways.We examine the changes and impacts in various areas.

External aspects

The prompt intervention in Afghanistan to overthrow the Taliban as a direct consequence of the 9/11 attack on continental US. However the area was not pacified and the Taliban allowed to seek shelter in Pakistan. The aftermath showed that the terrorists were trained by Pakistan and funded by Saudi Arabia. The Iraq war against Saddam Hussein was launched without completing the task in Afghanistan. This led to the Taliban retreating and settling in lawless border areas of Pakistan and radicalizing the latter’s already challenged society. This has the direct effect of destabilizing the fragile Pakistani state..  The entire war on terror turned out to be wasteful farce as it ignored the real origins of terror and funding : Pakistan and Kingdom of Saudi Arabia.

The Iraq intervention succeeded in dislodging Saddam Hussein and his Baath regime but it led to the great instability in Iraq among the various factions in the country> There is constant tension among the various groups and general break down of law and order. The US war in Iraq also drained the US economy  and most of it  was recycled back to US contractors. Frustrated with the insurgency the US adopted brutal methods and subjected the prisoners to well documented practices at Abu Ghraib prison in Iraq. The Taliban prisoners were subjected to similar methods at Guantanamo Bay prison.
In addition the US designated as Axis of Evil those countries that were not toeing their line. Of these Syria, Libya, Iran all are in the Middle East and the fourth North Korea is in East Asia. All pursued nuclear programs and of them North Korea has tested nuclear weapons twice in this period. All these showed the diminishing goodwill and moral compass of the US and the erosion of US political power.

Internal Aspects

The US internal response to the 9/11 attack was a total overhaul of the internal security apparatus. A new Department of Homeland Security was created merging the various diverse agencies already in existence. Airline travel restrictions on passengers were imposed to prevent future airplane hijacks and are accepted without protests by the populations a necessary security measures. A whole range of new legislation was passed which overturns the traditional notions of individual liberty that were the founding ethos of the nation. The DHA smacks of similar institutions in totalitarian states. The local police reacts with excessive zeal on suspicious acts and a low level of paranoia has been allowed to express itself. There were many instances of ‘old’ ladies giving vent to their xenophobic fears of the immigrants in planes. Coupled with the economic meltdown and the consequent employment losses this factor will be more overt in the future unless the economy recovers.

Financial crisis

The financial markets meltdown in 2008 was attributed to the sub-prime mortgage market souring due to borrowers being unable to pay. The real roots of the problem were the boom in real estate market after the tech market collapse in 2000 which drove the players to invest in real estate. This led to the real estate boom particularly in the very states that are suffering from the housing market doldrums: California, Nevada, Florida. The boom caused the house prices to rise above the affordability index of the people. The Federal Reserve lowered the interest rates to cushion the stock markets down turn and this move was used to finance the boom in real estate. New mortgage instruments like sub-prime mortgages were created to enable more people to participate in the real estate sector and increased the housing demand. Fears of market heating up led to the feds under Ben Bernanke raise interest rate from 2006 onwards and these fuelled the sub-prime mortgage crisis as people were unable to pay the rising mortgages. All these came to a head in the liquidity crisis of the Lehman Bros the primary market creator of the mortgage based securities. Instead of bailing out Lehman Bros., the govt. chose to ignore the fallout and ended up with a domino effect. This led to banks and auto finance companies all failing. The irony of the crisis is that it took the entire Western banking system down as Europe was affected by the crisis in US.  And the moral authority to preach fiscal discipline to third world countries is also gone. On the domestic political front the crisis was triggered during the Republican administrations which are supposed to be more fiscal conservatives. And the bailout packages in the aftermath that were presented were more like Democratic proposals. The international impact of this crisis was the emergence of G-2 that is US and Peoples Republic of China as the two largest economies and conjoined together as debtor-debtee nations. This will have foreign policy implications in future as PRC determines how they will recover their investments. The large economic stimulus packages in the European nations have enabled them to recover already.

Obama Election

In November 2008 the US elected Barak Obama as President  for change. In fact he got better international cheer than in his own country. He has already taken steps to correct the battered image of US in the world. He has taken active measures to rein in the excesses of the business community but they are still not adequate. One of the active measures has been to have a direct role in foreign policy with the State Department taking a secondary role. He has shut down the prisons and is working to recover the moral authority for the government apparatus by shutting down the G’ Bay prison and prosecuting prisoner abuses excesses. The danger here is that the US zeal to escape culpability will reduce the ascendency of the West and damage the very idea of the West as child of Enlightenment. The one tool that is still in US control is spread of religion under the guise of freedom of religion. All other tools have been blunted or weakened.
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