Letter from Lisbon, re Wolfowitz Jude Wanniski March 18, 2005

Memo To: Website Fans, Browsers, Clients
From: Jude Wanniski
Re: A European View

Earlier this month I spent a weekend in Lisbon, Portugal, at a NATO workshop organized by Dr. Mendo Castro Henriques, director of the Portugal's National Defense Institute. Paul Wolfowitz was discussed in the course of the proceedings, attended by scholars, military men, political figures from the Mediterranean states. Someone even brought up the rumor that Wolfowitz was being considered for the World Bank, but I noted another report that he was going to remain at the Pentagon. The room seemed cheered by my observation that the neo-cons might be in decline given the appointment of Bob Zoellick to be deputy to Condoleezza Rice at State. When I wrote my memo on the margin earlier this week about Wolfowitz actually getting the World Bank appointment, I sent a copy to Professor Henriques and asked if he would share his view with me. Here is his most thoughtful response, with surprising references to George Kennan, the legendary American diplomat and Cold War strategist, who died just yesterday at 101.

Dear Jude:

I read your brilliant note on the margin about Wolfowitz' election to the World Bank and I am answering to your solicitation of my view. Of course you know better than me the implications of his choice and you prove how the non-expert is a good tool for the dark forces behind him. On the other hand, he may be the inevitable man. The correlation of forces that enabled him to be chosen indicates that, perhaps no alternative was possible. Let me say why.

In Washington, the neo-cons pretend to make grand new policy. In fact, it is perhaps just another day in US hegemony, with a big difference, of course, because it is becoming increasingly malignant. In 1949, after George Kennan's Long Telegram, NSC 68 announced global hegemony. Only the U.S. government had resources to maintain world order, which required a massive warfare state and a permanent global military and CIA presence. In 1949, the U.S. elite established global institutions, such as a world court, a world central bank, (Wolfowitz' heritage) a world economic planner, and a world police force. That was contention Number 1.

There was a second dimension in Kennan's contention: Contain yourselves in order not to imitate the preposterous procedures of the Soviet empire. That would be contention Number 2. Yet, no one doubted the glories of the escalating welfare-warfare-national security state. The only critics were Marxists. No isolationists; no La Follette's independents with the Wisconsin idea; no Southern Agrarians. No anti-socialist element in American life could be anything other than pro-expansion.

George Kennan's two meanings of contention were abided during the Cold War and the system worked until there were no more adversaries. The Cold War was a Western civil war: democratic-liberal States and political parties against socialist-democratic States and parties. A Peace Treaty did not follow the end of Cold War. As you say, Jude, diplomacy did not substitute for warfare.

In Europe de-marxization was cynical and the old Left imperialist cronies united with the new Right neo-con trendies. The US was unable to avoid international political conflicts. Meanwhile, the moral legitimacy of government, its officials, and its policies was on the wane. Politicians as a class, and not just one party, are deeply distrusted and detested. Non-voting - and switching vote - became a form of secession from a system that offers the illusion of democratic participation.

In the 80's, Jude, your group won the "supply-side economics" battle. The US economy recuperated and the world benefited. Technological developments outpaced the ability of government to control them. The public rushed for the capital markets. Private arbitration replaced government courts. Market forces overwhelm government power on a daily basis. Nobody in Washington believes in Keynesian fiscal planning.

Yet, in the 90's , in the wake of the "War that was not concluded by a Peace" came Bosnia, Gulf I, Somalia, Liberia, and the US government switched from welfare state to warfare state. The growth in government spending in arms procurements increased dramatically. 9/11 was just an upgrading of the process. The power elite became disconnected from government. They make fortunes by attention to the needs of the consumer, and through a competitive struggle. They witnessed the power of the market economy to transform society and individual lives, and have seen nothing but failure from government programs. This corporate elite is disconnected from the idea and regulatory apparatus of the nation. (see Mel Gibson's Patriot).

So there can be an economic boom, a soaring stock market, and a very low unemployment rate, but the Fed keeps boosting the money supply and petro-dollars are all round. The old ladies in Tokyo, the astute wahabite Saudis and Gulf people and now Chinese "capitalist patriots" in Shangai or Singapore are supporting the declining value of the dollar on international exchange. You, and the Mundell school - know better how poor states in the world keep paying for the 1971deregulation.

In time, the boom will bust. In the next recession, the forces of government may be unable to impose the fiscal and regulatory planning that they once enacted. Why? Because the state is in the wane, absolutely eroded. To impose a reversal of trends in government power requires a consensus in favor of government "solutions" that no longer exists. The "state is too small for big issues, and too big for small ones"

We witness again the process that began in the late 1980s, when socialist regimes crumbled despite every prediction about their permanence. The anti-state forces are working out in different and unpredictable ways. The foundations of all-round statism collapsed. A malign US Empire is the inevitable solution to keep big government and an artificial good economy.

In this context, Wolfowitz is the inevitable man and he stands as another icon for the expiring of freedom in our time. If pseudo-intellectuals like Wolfowitz -and businessmen like Shultz and others you mention - become money grabbers instead of law abiders; and if real intellectuals are silenced or put into dissidence, the U.S power elite becomes singularly cynic and may provoke a real tragedy, a conflict with no issue. Pearl Harbour, Vietnam and 9/11 were followed by victories. They were no tragedies. I think you must be prepared for real tragedies, at home or abroad. American dissidents are the most important to the world because the US is atop the pyramid of power. Shall we see them winning or just resisting?

Mendo

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[Another interesting assessment of Wolfowitz from Michael Lind:

http://fairuse.1accesshost.com/news4/lind-catastrophic-success.html JW]