Monday, 28 May 2012

How Mitt Romney could threaten global logistics

Just as politics and economics are often deeply entwined so, too, politics can impact logistics for better or worse. That scenario could soon be tested after America's presidential elections later this year if the republican candidate, Mitt Romney, wins the presidency. Such a victory could have unfavourable, seismic implications for global logistics, not because Romney is inexperienced in smart business that makes use of morally questionable tax havens like the Cayman Islands, (his personal wealth has been put at between US$190 million- $250 million) but because his foreign policy nostrums have an almost xenophobic, pugilistic air.

Among his reportedly pugilistic posturings is a promise to launch a US-Israeli war with Iran if the latter continues to develop its allegedly nuclear weapons capabilities. He has also described Russia as the number one geopolitical foe and in the primaries he vowed to start a trade war with China. As if that were not enough he wants to extend the war in Afghanistan until the Taliban are defeated.

Such rhetoric is akin to the virulence of America's hard right evangelicals on the make, to whom he looks for support, and as a Mormon Romney's theological naivety has much in common with the evangelicals. Both are rooted in the belief that America can do no wrong owing to their exceptionalism. Both have parallels with Israel's 'chosen race' belief and, indeed, Romney has a long-standing, close relationship with Israel's Benyamin Netanyahu. But playing the Israel card may just be Romney's way of soothing any suspicions his evangelical base may have.

Romney has surrounded himself with advisers like Eliot Cohen, the man who wrote the forward to Romney's foreign policy manifesto and who wrote that Saddam Hussein not only helped Al Qaeda but developed weapons of mass destruction. Such a monstrous lie, however, does not seem to have tarnished his image in the Romney camp.

No austerity for the military

Romney is campaigning on an austerity ticket but with one big difference. Reportedly, he wants to grow the Pentagon budget so fast that it will reach 4% of GDP, a huge hike over the increase under George Bush's tenancy. By 2016 his military spending would be close to 40% more than budgeted under Obama, a level not seen since the cold war.

Such a huge increase can only be financed in two ways: higher taxes and spending cuts, particularly in the welfare budget. But Romney has already promised tax cuts so the burden will fall heavily on those least able to defend themselves: the old, the poor and the ill, through welfare cuts. This seems curiously at odds with the Christian ethos of righteous living, which must include feeding His sheep, but more of that later.

Some believe that once in office Romney would mellow his pugilistic posturings and be a far more traditional republican than George Bush but what if they are wrong? How could that affect logistics costs and does he have any justification for his dubious foreign policy stance that almost demonizes certain countries?

Trade is the handmaiden of prosperity and prosperity the lasting foundation of peace. Any talk of a trade war with China, therefore, can only be irresponsible and unstatesman like. China is certainly no angel in foreign trade, its record on intellectual property theft, in particular, is a running sore that must be excised. But the American electorate should not lose site of the facts that not only has China kept world inflation down it has helped save America from serious economic upheaval by purchasing American IOUs.

War and the American debt problem

America's total public debt, including intra-Government debt, is put at $15.7 trillion, or a disturbing 102% of GDP. Of the $10.95 trillion of debt held by the public, nearly half, or $5.1 trillion, is owned by foreign investors, the largest of which are Japan and China, with just over $1 trillion each. Without Chinese bank rolling of the American government debt it would be difficult to see how America could keep its interest rates low. There appears to be a correlation between America's soaring debt problem, $500 billion a year since 2003, and the prosecution of costly overseas wars in the Middle East. The Iraq war has certainly cost America over $1.5 trillion and the Afghanistan intervention is estimated at $2 billion a week, and that does not include the aftermath costs of dealing with the permanently maimed, the widows and orphans.

If Mitt Romney had any idea of how geo-logistics* can make or break combatants in a land ideally suited to guerrilla warfare he might think twice about ramping up military effort there at a time when America's finances are shaky along with most of Europe's. As for demonizing Russia he may care to reflect that Russia has agreed to let the coalition forces in Afghanistan send their military baggage home by rail through Russia. Such an act will save Britain alone £4 billion in military hardware write offs because the cost of airlifting the lot to western Europe would exceed the value of the hardware. By recalling a far greater debt the free world owes Russia, the appalling sacrifices the Russian peoples made in ridding the world of Nazi tyranny, Romney might moderate his political nostrums, but that would require a comprehensive grasp of modern history.  
China and Russian bashing, therefore, is both unwarranted and unstatesman like.

Dangerous attitudes over Iran

What of Romney's attitude to a Judeo-Christian attack on Iran's nuclear capabilities and the implications for global logistics? If carried out, a worst case scenario would be to plunge the world into a depression, hardly the best time given the West's current flirtation with recession. The closing of the Hormuz Strait, for example, as an Iranian retaliatory measure, could send already painfully high oil prices soaring and that alone would cripple global logistics. And if attacked it would be a blatant act of war and any riposte against Israel's nuclear capabilities would be justifiable by the standards of warfare. Not surprisingly, perhaps, there was never any talk of chastising Israel when it embarked on a nuclear armament programme. Is it surprising, therefore, that Iran feels threatened by Israel's nuclear arsenal and might want to have its own nuclear weapons as a safeguard. After all, Israel has bombed Iran's nuclear facilities before. Israel, however, is more politically stable than Iran, if somewhat too bellicose at times, and the latter would be wise to eschew nuclear weapons if, indeed, it is pursuing that path.

Politics has always been a low profession but it becomes more dangerously so when leaders espouse theocratic elements, a good reason why America's founding fathers ensured that state politics should be purely secular and unfettered by theological clutter. The problem is, however, that political mountebanks could woo and win over the theologically naive. The American people are basically good at heart and the world owes an indelible debt to their sacrifices for democracy. But many Americans, especially in the Bible Belt, are insular and gullible and it is these traits which in the hands of a manipulative president could become a dangerous weapon.

The price of freedom may be eternal vigilance but that vigilance must be righteously minded. Can one say that of Mormons and the more virulent scions of hard right evangelicals? Quite apart from the touchingly naive origins of Mormonism, their pioneering days were not without blemish. In the relatively peaceful 1857-58 Utah Mormon war, leaders of the local Mormon militia ordered the Mountain View Meadows massacre of civilian emigrants merely passing through Utah, hardly a saintly act, latterly or otherwise. As for the hard right evangelicals, could it not be said that their TV evangelist leaders' true God is mammon? They have exploited generous American tax law which grants tax exemptions to religious movements. In other respects, however, they run their operations like well-oiled businesses and have amassed huge property fortunes. Can man serve both God and mammon? By their fruits ye shall know them and to the hyprocrites and false prophets the Nazarene had this to say: "I never knew you: depart from me ye that work iniquity." Perhaps the next time that the plate comes around with behests to give generously because the cost of maintaining the fleet of corporate jets is soaring the gullible might question if they are backing the right horse.
*How geographical issues can impact logistics.   

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