Ancient thinkers from Thucydides to Cicero insisted money was the real
source of military power and national influence. We have been reminded
of that classical wisdom these last three weeks.
In a manner not seen since the Great Depression, Wall Street
went into panic mode from too many bad debts. The symbolic pillars of
American monetary strength for years - AIG, Goldman Sachs, Merrill
Lynch, Shearson-Lehman and Washington Mutual - in a matter of hours
either went broke, were absorbed or were reconstituted. Fannie Mae and
Freddie Mac collapsed like the house of cards they were.
Even though the U.S. government rushed to restore trust, hundreds of
billions of dollars in paper assets simply vanished. Friends and
enemies abroad were unsure whether the irregular American heartbeat was
a major coronary or a mere cardiac murmur. How strong really was the
world's greatest economy? Was this panic the tab for years of borrowing
abroad for out-of-control consumer spending? Had America finally gone
too far enriching dictators by buying energy that it either could not
or would not produce itself? Had the chickens of lavishing rewards on
Wall Street and Washington speculators rather than Main Street
producers finally come home to roost?
Allies trust the United States
is the ultimate guarantor of free communication and commerce - and they
want immediate reassurance that their old America will still be there.
In contrast, opportunistic predators - such as rogue oil-rich regimes -
suddenly sniff new openings.
We've seen the connection between American economic crisis and world
upheaval before. In the 1930s, the United States and its democratic
allies, in the midst of financial collapse, disarmed and largely
withdrew from foreign affairs. That isolation allowed totalitarian
regimes in Germany, Italy, Japan and Russia to swallow their smaller
neighbors and replace the rule of law with that of the jungle. World
War II followed.
During the stagflation and economic malaise of the Jimmy Carter
years, the Russians invaded Afghanistan, the Iranians stormed our
embassy in Tehran, the communists sought to spread influence in Central
America and a holocaust raged unchecked in Cambodia.
It was no surprise that an emboldened Iranian President Mahmoud
Ahmadinejad once again last week called for elimination of Israel. He's
done so several times before. But rarely has he felt brazen enough to
blame world financial problems on the Jews in general rather than on
just Israelis. And he spouted his Hitlerian hatred in front of the
United Nations General Assembly - in New York, just a few blocks away
from the Ground Zero of the Wall Street meltdown.
Flush with petrodollar cash, a cocky Iran thinks our government will
be so sidetracked borrowing money for Wall Street that disheartened
taxpayers won't care to stop Tehran from going nuclear.
At about the same time, a Russian flotilla was off Venezuela to
announce new cooperation with the loud anti-American Hugo Chavez and
his fellow Latin American communists. The move was a poke in the eye at
the Monroe Doctrine - and a warning that from now on the oil-rich
Russians will boldly support dictatorships in our hemisphere as much as
we encourage democratic Georgia and Ukraine in theirs. Mr. Chavez
himself called for a revolution in the United States to replace our
The lunatics running North Korea predictably smelled blood as well.
So it announced it was reversing course and reprocessing fuel rods to
restart its supposedly dismantled nuclear weapons program.
Meanwhile, some shell-shocked American bankers looked to our
"friend" China, which holds billions in American government securities,
for emergency loans. But the Chinese - basking in their successful
hosting of the Olympics, their first foray into outer space, and a
massive rearmament - showed no interest in sending cash to reeling Wall
During this Wall Street arrhythmia, Islamic suicide bombers attacked
the U.S. Embassy in Yemen and the Marriott Hotel in Islamabad,
Pakistan. Suspected Islamic terrorists were caught boarding a Dutch
airliner in Germany. And suicide bombers were busy again in Afghanistan
The natural order of the world is chaos, not calm. Like it or not,
for over a half-century the United States alone restrained nuclear
bullies, kept the sea lanes free from outlaws and corralled rogue
nations. America alone could provide that deterrence because we
produced a fourth of the world's goods and services, and became the
richest country in the history of civilization.
But the bill for years of massive borrowing for oil, for imported
consumer goods and for speculation has now finally come due on Wall
Street - and for the rest of us as well.
Should that heart of American financial power in New York falter -
or even appear to falter - then eventually the sinews of the American
military will likewise slacken. And then things could get ugly - real