Cast your mind back to the last "Gulf War" - the one in early 1991 that lasted for about a month as an aerial bombardment followed by a 100 HOUR "ground war". Remember, as you think back, that "Gulf War I" was NOT an "aggressive war". It was fought for the military purpose of repelling an invader. Saddam Hussein did invade Kuwait in 1991. He was pushed out of Kuwait by a genuine "coalition" led by the US. And that coalition, including the US, did NOT pursue Saddam or his forces back to Baghdad. The tragic error that the US made was not in defending Kuwait, it was in leaving large numbers of their own troops in the Middle East, notably in Saudi Arabia, after they had won the war. And win it they did, decisively.
If you cast your mind back those twelve years, you will probably recall that very little in the way of "denial" was issuing from the mouths of the political and military powers that be in 1991. There was no need for denial. The US did NOT face a hostile world, it led a legitimate coalition. The US was NOT an aggressor nation, it was defending Kuwait against an attack by Iraq. And besides all that, there was little need for any "denial". The war was fought quickly and won brilliantly.
Having seen all that twelve years ago, a great number of people, INCLUDING those who decided to have this war and then "planned" this war, fully expected a repeat performance. They HAVE had a repeat performance. The problem is that the "repeat" is not of the success of "Gulf War I", it is of the early stages of VIETNAM. And we all know how THAT one turned out.
Having lived through Vietnam, this writer remembers well the cloak of "denial" that grew denser with every phase of that war. The most ominous aspect of the present war in Iraq, apart from the now obvious derailment of the initial planning, is the growing chorus of DENIAL which is rising up from every member of the "coalition of the willing". In press briefing after news conference after interview, the US, British, and yes - Australian powers that be are all chiming in. Mr Bush started with assertions - the war is "ahead of schedule". Then, he reverted to claiming that the war was "going as planned".
But over the past few days, as the war entered its second week, the assertions have wound down and the avalanche of denials is beginning to roll over us all. All the politicians - Bush, Rumsfeld, Cheney, Powell, Blair, Howard, et al - are busy telling us what has NOT happened. NO - the planning was not faulty. NO - there was no mistake about the willingness of the Iraqi army and people to welcome us as liberators. NO - we never said this war would be over quickly. NO - we have not left our supply lines vulnerable by rushing headlong at Baghdad. NO - that's not Saddam on TV.
Consider this carefully. Those of you who remember, cast your minds back to what the powers that be of the day were saying about the Vietnam war. It was the same denials, about the same subjects, only the enemy and the locality have changed. It is ominous in the extreme.
In any political process, whether it is the prosecution of a war or the "management" of an economy, you can always tell when the "plans" are going off the rails. That's when the denials start. In an economic/financial context, the perfect example is the record of the US Federal Reserve in general and Head Fed Alan Greenspan in particular. They have been denying almost everything, almost non stop, for more than three years now.
The Fed's rate cuts in 2001 were eleven separate and ever more desperate instances of economic denial. The impressive array of euphemisms for the state of the US economy ("a soft spot" being one of many) are all instances of denial. The list goes on.
But there is an important diffence between the art of denial in the realm of economic and financial intervention and the art of denial in military intervention. The difference is one of visibility. Wars and battles are both highly visible and the results are comparatively easy to understand. Yes, battles can be lost but wars won, or battles can be won but wars lost. All of it, in these days of live TV coverage and internet access, are available for perusal by anyone who chooses to keep informed. One can see the results as they unfold in the form of dead bodies and devastated towns and cities. In short, one can see the effect that the action is having in real life.
Economic and financial intervention is not like that. It is insidious, and most of its effects are never seen. The obvious aspects are things like the levels of stock markets, bonds, interest rates, and currencies. But the REAL damage, in the form of lost opportunities, stifled ambitions, loss of confidence in the future, and misplaced efforts are not seen. Neither, in most cases, are the results of this damage - until it is much too late.
It is when the future looks bleakest, in a war or in an economic slump, that the denials rain down. Usually, they lose their effect as a result of desperate repetition. In a war, this is the point where information starts to be censored. In an economic recession, this is the point where the signals that ARE visible start to be faked.
As witness, we present the HUGE leap in US and world stock markets and in the Dollar during the week in which the war began. Also, as the necessary corollary, there was the dive in the $US Gold price. That was seen. What was NOT seen, because few wanted to look, was the connection between this "market" action and a statement made by Japanese Chief Foreign Secretary Fukuda - as reported in this commentary last week:
"There was an agreement between Japan and the US to take action co-operatively in foreign exchange, stocks and other markets if the markets face a crisis."
The most insidious act of all by those involved in an economic/financial manipulation, the equivalent of sinking a hospital ship in time of war, is the act of trying to cut off any way of protecting oneself against the depradations of those doing the manipulating. This is done by "deep sixing" Gold. It has been done again this time, with an unusual degree of desperation. Even more revealing, the intention to do it was broadcast for all to see by the Japanese, with the US staying silent.
Mr Fukuda ASSERTED that the Bank of Japan and the Fed stood ready to "act". So did Bush, Cheney, Rumsfeld, Powell et al in the lead up to this war in Iraq. Act they have, each in their separate sphere. The war is not going well for the US in Iraq and the political battle has already been lost. The US will come out of this episode, no matter what the result in Baghdad, with their global stature and credibility terminally damaged. So will the Bank of Japan and the Fed in their "battle".