A Turn for the Better

-- Robert M. Liu

Since Iraqi general Mohammed Abdul-Latif and his all-Iraqi Fallujah Brigade moved into Fallujah (a stronghold of Iraqi insurgency), the situation there has stabilized. At a meeting with Fallujah's local leaders, the general called Saddam Hussein a coward who, driven out of a rat hole, had disgraced Iraqis.

At least for now, General Abdul-Latif appears to be well accepted by the locals in Fallujah. Although media reports indicate that he was a Republican Guard general under Saddam Hussein, what is important is that he has military expertise and has apparently switched his loyalty to the new Iraq.

Hopefully, more former Iraqi officials and generals will decide that it is in their interest to switch allegiance and contribute their professional skills toward building a democratic system in Iraq, now that a new Iraqi government has been organized with the U.N.'s blessing. What's more, Iraq's most respected cleric al Sistani has endorsed the new government. This will help inspire loyalty in the Iraqi people toward the country's new political entity.

In politics, as in business, loyalty is an essential factor. If the Iraqi people decide that it is in their interest to pledge their loyalty to their new government, now endorsed not only by the international community, but also by their own most respected cleric, stability and security in Iraq will materialize in due course, which in turn would allow U.S. troops to phase out of Iraq in the coming months and quarters.

Ironically, despite a new U.N. resolution that provides for the handover of sovereignty to Iraqis and for multinational forces' continued presence in Iraq to help the new government secure the country, France, Germany and Spain still refuse to send troops to Iraq, simply because they are unwilling to assume their responsibilities toward global stability.

Democratic presidential candidate John Kerry complains about the Bush administration's "arrogance" having turned away allies. Such grumbles seem to suggest that France, Germany and Spain would send troops to Iraq if Kerry won the election in November-- because, according to Kerry himself, "foreign leaders" have told him in private they want him to be president.

If so, it is time Senator John Kerry called French president Chirac, German chancellor Schroeder and Spanish prime minister Zapatero to make them promise publicly and categorically that they would send troops to Iraq if he became U.S. president. That way, voters would have a real choice in November.

The fact is that while Iraq is not a Vietnam-type quagmire as Senator Ted Kennedy would like the public to believe, it does feel like a hot potato, given the frequent terrorist bombings there. This is because the terrorist insurgents in Iraq want the country to remain that way, thereby enabling the political left to accuse George W. Bush of "having created more terrorism in Iraq".

The question is: When was it that Iraq was not a hot potato? Wasn't Iraq a serious problem under Saddam Hussein? The mass graves where half a million victims' bodies were uncovered after the Iraq War indicate that Iraq had become a slaughter house under Saddam Hussein with the connivance of the international community.

Apparently, Saddam Hussein's Iraq had been a cancerous tumor for a long, long time, and it would not have gone away without a surgery. The debate over the Iraq issue before the 2003 Iraq War had been between those who believed this cancer should be removed and those who thought it shouldn't.

For instance, after Saddam Hussein's troops were driven out of Kuwait in January 1991, former U.S. president George H.W. Bush and former British prime minister John Major decided not to topple Saddam Hussein's regime, because they knew Iraq was a hot potato. In 1998, Congress passed the Iraqi Liberation Act, but the Clinton administration didn't enforce it, because Iraq was a hot potato.

But Mrs. Margaret Thatcher said that by not toppling Saddam Hussein in 1991, the U.S.-led coalition had lost an opportunity to resolved the Iraq issue. Of course, Mrs. Thatcher knew Iraq was a hot potato. Still, she thought the problem should have been resolved in 1991 when Saddam Hussein's army had been defeated. John Major disagreed. He said that in 1991 the coalition did not have a U.N. mandate.

Like ordinary people, politicians have different opinions. It is up to you to decide who is right and who is wrong. History, however, shows that both Bush senior and John Major were not rewarded for their cautiousness (or lack of boldness) -- they were both voted out of office after the 1991 Gulf War.

In my opinion, Mrs. Thatcher was right. Opportunities don't knock at the door every day. It was a pity that the U.S.-led coalition let Saddam Hussein survive his 1991 defeat. By doing so, it sent a wrong signal to the world's various evil doers that even if they were defeated they would still have a second chance.

Saddam Hussein (with or without WMD) was a serious threat to its neighbors as well as a growing danger to America due to his ties to terrorist groups. Cautiousness (or the lack of a U.N. mandate) was no excuse for not resolving the serious problem when the opportunity arose.

There are indications (if not solid proof) that Saddam Hussein's regime may have been involved in the September 11, 2001, terrorist attacks on the United States. First, not long before 9/11, Saddam Hussein's media propaganda machine suggested that Osama bin Laden was going to "strike America on the arm that's already hurting". Then, after 9/11, it applauded the attacks.

How could it know that Osama bin Laden was going to hit America's already recessionary economy (i.e. "the arm that's already hurting") if bin Laden's al Qaeda terrorist organization had not been infiltrated by Saddam's secret agents? The al Qaeda terror group has been wide open to all sorts of anti-U.S. elements. Saddam's secret agents could infiltrate it easily.

On the Saddam Fedayeen lists seized by the U.S.-led coalition, there is the name of Lieutenant- Colonel Ahmed Hikmat Shakir. A man of the same name was working at Kuala Lumpur airport, Malaysia, having obtained the job through an Iraqi intelligence agent at the Iraqi embassy there. Ahmed Hikmat Shakir was present at the January 2000 al Qaeda meeting in Kuala Lumpur which decided on the 9/11 plot. After 9/11, the man returned to Iraq.

Today, Iraq remains a hot potato -- there is a need to limit the amount of material support the insurgents could receive. But with the installation of the provisional government, the situation has taken a turn for the better. The provisional government is beginning to show its ability to run the country's affairs in the Iraqi way. If that is not the case, you bet Ted Kennedy would be on TV shouting "Quagmire!"

For better or for worse, after the June 30th, 2004, handover of Iraqi sovereignty, Iraqi security will be the Iraqi provisional government's responsibility. They will have to deal with this hot potato. After all, it is their country, though the international community (including America, Britain, France, Germany etc.) has a collective responsibility to help the new Iraq stand on its own feet. John Kerry shouldn't create excuses for the irresponsible attitude adopted by France, Germany and Spain.

In the meantime, on the economic front, things have also taken a turn for the better. Since August 2003, strong GDP growth has helped add one million four hundred thousand jobs to the U.S. economy. This has already caused the Federal Reserve to put Wall Street on notice that it might raise its benchmark short-term Fed Funds target rate in a measured manner later this year from its 46-year low of 1%.

Apparently, the Bush tax cuts and the Fed's accommodative monetary policy have worked very well toward jump-starting the economy. If that is not the case, you bet the Democrats would be on TV shouting, "Tax cuts don't work!"

Former president Ronald Reagan passed away on June 5th, 2004, at the age of 93. Experts are now discussing his legacies and achievements on TV. They agree that one of Reagan's legacies was his economic policy: Reaganomics. This is a supply-side theory of lower tax rates and deregulation (i.e. less business-unfriendly regulation).

The political left would tell you, "Reaganomics didn't work!" "Reaganomics only created high budget deficits!" -- etc. etc.

Well, in 1981 when Reagan took office, the U.S. federal deficit stood at $80 billion, accounting for 2.5% of GDP. By 1983, the deficit had risen to $200, or 6% of GDP. The early 1980s was an era when the Cold War was raging, which led to high U.S. defense spending. But there is no denying that the U.S. economy began to grow vigorously under Reagan.

In 1981, America's Gross Domestic Product was worth about $3.2 trillion. Now, America's GDP is worth more than $10 trillion with a federal budget deficit of perhaps more than $400 billion for fiscal 2004, or 4% to 4.5% of GDP. Since the Reagan presidency, America's economy has more than tripled.

It is worth noting that the U.S. is in the middle of a costly global war, the War on Terror, which is enough justification for a manageable federal deficit of 4% to 4.5%, and that despite this war-time deficit, inflationary pressures remain mild or close to zero. GDP growth is strong. The jobs market is reviving. It is hard for me to believe such demagoguery: "Reaganomics didn't work!" "Tax cuts don't work!" "The economy is moving in the wrong direction!"

(June 12, 2004)