The Financial Crisis and 9/11

Some commentators compare the current economic crisis to 9/11 — a cataclysm that changed everything.

On September 17, 2001, I wrote “Six Predictions about the Coming War and a 10-Step Program.” I got some things right and some quite wrong. I’ll open up the time capsule here and lay out a bit of its contents. Then, I’ll make some predictions about how economic crisis and military spending will intersect and how we could respond.

Three predictions I made were about U.S. domestic politics:

1. The U.S. government will attempt to provide increased security, but perfect security is impossible. Terrorists will use “more inventive and potentially more deadly means of assault.”

2. In the name of unity and patriotism, the critics of U.S. domestic and foreign policy will face increasing pressure to follow the party line. Self-censorship will grow and those “in the government who propose alternative responses to terrorism besides the U.S. of military force will be pushed aside in favor of those who urge a more militant response.”

3. “The U.S. economy is likely to go into a much worse recession than predicted.” I argued that this was in part due to declining consumer confidence and increased military spending, which is overall less productive than spending in other sectors. “One of the consequences of the recession will be that there will be fewer resources available for other programs and causes — environment, health, education, and welfare.”

I had three predictions about the international effects of 9/11:

1. “The U.S. will act militarily, diplomatically, and economically against terrorists and the states which are seen to harbor them. While in the short term the world seems united against terrorism, over the medium and long term the war will likely lead to polarization. Why? Military actions to destroy terrorist camps and to find and capture terrorists will in cases where terrorists hide in urban areas, lead to significant casualties among innocent bystanders. Furthermore, the “U.S. has framed its war on terrorism as a crusade where God is not neutral.”

2. “Military actions by the U.S. will likely promote greater military action by terrorists whose resolve will grow in the face of increased U.S. presence and activity in the Islamic world, who seek revenge against U.S. retaliation…”

3. Military spending will grow. “Pressures will grow within Iraq, Pakistan, India, China, and other states to acquire more military power as moderates are overshadowed by militants who seek to counter U.S. hegemony.” As these states acquire weapons of mass destruction, neighboring states will also feel pressure to acquire them. I said regional instability and perhaps wars will likely increase.

Now I’ve got some predictions for the post-financial crash world and some suggestions for how to make them failed predictions:

1. First, a no-brainer: the U.S. budget will need to be cut to pay for the “rescue.” Unless we can mobilize a strong counterweight, the cuts will mainly come from domestic programs — education, health, alternative energy, infrastructure improvements. There may be cosmetic cuts to some military programs.

2. Military spending will continue to be essentially unproductive but its share of government spending may grow. The military spending that focuses on healthcare and education for veterans is “productive,” but that may suffer in this climate. We must push for meaningful military budget cuts. For instance, we might argue for a commission on closing U.S. overseas military bases. We should argue for cutting military programs like missile defense, which are both destabilizing and wasteful.

3. Americans will remain afraid — and rightly so. Homeland security is, in a word, a mess. Current U.S. foreign policy results in too many accidental killings of Afghan, Pakistani, and Iraqi civilians, and creates more resentment abroad. Economic anxiety will feed into feelings of insecurity.

4. There will be pressure to approve any program that is said to create jobs, including programs to sell military equipment and nuclear technology overseas. We’ve seen it already. The long-term counterproductive aspects of these programs will be deemphasized. We need to resist the jobs-at-any-cost mantra and emphasize not only how military spending is less productive than other modes of spending, but also how military and technology export programs have a tendency to “blow back.”

5. As after 9/11, American leaders will likely become even more cautious about domestic and foreign policy. Our “leaders” will hunker down, think small, and point fingers. Unless we can mobilize a dramatic rethinking of U.S. foreign policy, it will likely remain much the same no matter who is in the White House. Now is the time to push for creative solutions and stress the need for big thinking. We need to stress how the conventional wisdom has been wrong, not only on U.S. foreign policy but also on the environment, health care, education, and energy. The progressive community needs to continue to be farsighted, proactive, and bold.

Neta Crawford is a contributor to Foreign Policy In Focus and a professor of political science and African American studies at Boston University.