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What To Do Regarding Iraq
Dated July 22, 2007

It is very unfortunate that the immense exertions of the Administration regarding Iraq have not put us on a sure path to success. What is at stake is even more terrible than the possible increase in terrorist strength. There is the grave peril that a wrong move could trigger a chain of events that leads to the abandonment of the dollar by the Muslims powers.

The US dollar is the world reserve currency. The Muslims reside within the dollar bloc and denominate their oil sales in dollars. If enough countries unload dollars—if most of the Muslim oil producers unloaded dollars, for instance--, then the dollar could no longer remain the world reserve currency and how would we purchase foreign oil and goods if no one wanted our dollars? If the dollar looses its preeminent status, depression could strike.

Washington has been pursuing high-level policies that eventually could stampede the Muslims out of the dollar. First of all, the United States, thanks to bi-partisan decisions, no longer offers the Muslims fair value for the life-blood, oil. Paper money greatly diminished by the piling up of debt and no longer backed by gold nor sufficient industrial production, is offered instead.

Suspicions abound abroad that the Administration means to hold the dollar bloc together by sheer force of arms. As long ago as the year 2000, Muslim oil powers murmured about quitting the dollar and switching to the euro. Iraq actually left the dollar for the euro about two and half years before we invaded the country. Iraq’s currency was subsequently returned to the dollar. How can Islam not conclude that we meant to make Iraq an object lesson, for having dumped the dollar?

Then there is the evident mishandling of Iraqi agriculture. Handed down in 2004, Coalition Provisional Authority Directive 81 could apparently derange native farming in favor of American big business. The use of seeds had been unregulated for thousands of years, but we changed the local law, putting the Iraqi farmer at risk of becoming indentured to American business, if the farmer uses genetically modified American seeds. 

Observing that some important elements of our statecraft are no way to win or keep friends for ourselves in country or across the region, and that we began our military occupation of Iraq on the wrong foot in 2003 when we refused to use at least some of the preexisting Iraqi security forces, it is no wonder our heroic armed forces are sorely pressed in Iraq.

What adjustments should we make? First and foremost, it is vital to backstop the dollar with increasing value. A longer discussion is in order here, but it is important to mandate ever increasing limitations on the acquisition of public and private sector loans, and to return to earlier practices, including high tariffs where appropriate, that enabled industry before 1972. 

In regard to the Middle East, the supreme object should be the maintenance of the dollar bloc through fairness. Let us simplify the task and not force democracy on Islam.

Any measure, such as Directive 81, that might take unfair advantage of the Iraqi population, ought to be rescinded. We have done much good, including in the areas of infrastructure and other humanitarian assistance. Let us do all good, and no bad.             

Let us preserve a favorable balance of power in and around Iraq. Toward that end, it is unnecessary to continue the present strategy in Iraq, and it is also very expensive and too risky. We could press on for another two or three years, losing even more blood and treasure, and very probably still see no end in sight. And consider this: the euro may comfortably be able to replace the dollar, as the world reserve currency, by about the year 2010. If the Muslim powers would be tempted to quit the dollar bloc now on account of unease they felt over our policies, imagine how much more tempted they would be if a relatively smooth transition from the dollar to the euro were available. Get the military adjustment over with now, not later, before the euro s fully ready to replace the dollar.       

There is an alternative to our military occupation of Iraq. It includes the shaping of the country into three zones, north (Kurds), center (Sunni) and south (Shiite), the lending of as much assistance during the transition as is practicable (e.g., money and helping Sunni and Shiites relocate in country) and disengagement.         

We need to be able to deliver a heavy punch at a moment’s notice during the transition, and on short notice thereafter. Initially all US forces should disengage from combat but remain in secure fire bases in country. Later most would redeploy out of country and some would remain among the Kurds. 

Saudi Arabia, Kuwait and the other small Persian Gulf states, should be safeguarded by us at all costs. American and allied forces should uphold the balance among the tripartite Iraqis,  Syria and Iran. Iraqi Shiite oil and Iranian oil, both of which are located in the desert at the head of the Persian Gulf, are easily accessible to American amphibious power, and provide very convenient pressure points to keep Iran and the numerically large Iraqi Shiites in line.                 

The public must be told there is no easy choice now. If the American military footprint remains large in Iraq, then this will inflame the Muslim, all the more. If we ultimately redeploy, then this may embolden at first the Muslim extremists or others, such as the North Koreans, or both. It is therefore prudent to increase American military power as a whole, featuring at long last the badly needed missile defenses, more conventional forces, more special forces and a stronger homeland security. 

Appropriations for the Iraq war could presumably be brought to an end in relatively short order, but the remaining defense budget should be increased by, perhaps, 25%. How should we pay for the increase? Do not resort to borrowing. No Sir! In view of the wider austerity measures we need to take at home, let us pay for additional military forces with corresponding cuts in government domestic expenditures.

 
IMPLEMENT THE ARMINIO ALTERNATIVE TO THE WAR IN IRAQ

  • Restore a foreign policy of benevolence, above all, through the revival of the value of the US dollar. Do not force countries to buy and sell in dollars, make it worthwhile for them to buy and sell in dollars, as it used to be!
  • Craft alliances of the willing, not the coerced.
  • Cease and desist from imposing democracy in Iraq or anywhere else, for that matter.
  • Divide Iraq into three parts, that is, Kurds in the north, Sunni in the center and Shiite in the south.
  • Encourage the tripartite Iraq to uphold a federal model.
  • Provide ongoing economic assistance for Sunni Iraq and the Kurds.
  • Offer economic assistance to Shiite Iraq if they leave the Sunnis alone.
  • Settle upon a division of forces to upkeep the balance of power in the Persian Gulf.
  • After the tripartite Iraq had been set up, all American forces would be withdrawn from inside Iraq, except for a small contingent that would remain among the allied Kurds.
  • American air, sea and amphibious power would be available to interdict, if need be, Iran and Shiite Iraqi oil shipments.
  • American might would shield Saudi Arabia, Kuwait and the other small Arabian states from attack, at all costs.
  • Sunni Muslims—those in central Iraq and hopefully from Egypt and Saudi Arabia—would hold the line in central Iraq. If we restore the value of the dollar, the Egyptians and Saudis would be much more willing to send ground power out of their respective countries.
  • Expedite the laying of the Trans-Arabia Oil Pipeline. This new network of pipes will disperse 40% of oil shipments from the Persian Gulf via land to the Mediterranean, Red Sea and Arabian Sea. It will, in other words, reduce the need to ship oil via the Straits of Hormuz chokepoint.
  • Rehabilitate and where necessary expand American military power. An adequate defense budget—excluding ongoing war operations--amounts to about 4% of Gross Domestic Product. The defense budget draws about 4.2% of GDP today but a sizeable fraction of that amount (0.7% of GDP) is being squandered on the war in Iraq, and another fraction (0.3% of GDP) is being spent in Afghanistan.
  • Expedite the development and deployment of wide-area ballistic missile and cruise missile defenses for the army and navy.
  • Increase the defense budget by about 0.8% of GDP at once. Anticipate in short order the retirement of war expenditures (in Iraq) of about 0.7% of GDP.
  • In view of the emergency austerity measures that need to be taken to rescue the American economy (see below), trade off any defense budget increases with federal domestic budget decreases. Do not pay for the defense budget boost with increased taxes or borrowing!