Global Economic Crisis

In a previous post on this website and the Huffington Post, I warned that the current Obama strategy for conducting the war in Afghanistan is doomed to failure (see http://www.huffingtonpost.com/…/can-the-us-win-the-war-in_b_212831.html ). Of course, President Barack Obama did not consult me when he decided to vastly increase the U.S. investment in lives and treasure in pursuit of achieving what the Soviet Union and British Empire had failed at; subduing Afghanistan.

With all this focus on U.S. options for Afghanistan, little has been said about Al-Qaeda’s goal. Even official U.S. sources admit that Washington is spending over $5 billion a month to support 100,000 U.S. troops confronting as few as fifty (yes, 50) Al-Qaeda members presently situated in Afghanistan. Perhaps Al-Qaeda’s goal is to achieve a maximum return on investment; 50 of its members stationed in Afghanistan, in the process further eroding the U.S. fiscal imbalance at a time of acute economic crisis in America. The leadership of Al-Qaeda has stated on several occasions that they seek to draw the United States into an Afghan quagmire, inflicting upon it the same empire-shattering blow incurred by the once powerful but no longer existing Soviet Union.

The leader of Al-Qaeda, Osama bin Laden, has stated that his objective is to drain the U.S. financially, bringing about its fiscal collapse and ultimate insolvency. If that is in fact Al-Qaeda’s objective, it appears that not only Obama, but almost the entire political leadership in the United States which currently supports the war, both Democrats and Republicans, have become unwitting allies of Osama bin Laden. This is a policy that is bankrupt both figuratively and literally, especially with America currently gripped by a ruinous economic crisis.

How long will Washington be able to borrow vast sums of money in the global bond market, solely to pursue 50 followers of Osama bin Laden in Afghanistan? Perhaps only as long as the Federal Reserve can hold off the next stage of the American banking crisis and real estate meltdown. Once the United States is engulfed by a full-fledged sovereign debt crisis, it will be exceptionally difficult, to say the least, for a financially bankrupt U.S. government to justify throwing away nearly $100 billion a year on a war that has become increasingly devoid of rational purpose.

Now, however, the price of oil is once again moving upward. In part, suggest analysts, this is due to a perception that the worst of the economic free fall is behind us. Whether those perceptions are valid or not (and I don’t believe they are), psychology is an important factor is establishing commodity valuation. However, I believe there are other forces at work, or which may intervene in the future, that could radically escalate the price of hydro-carbon energy irrespective of recessionary constraints on consumption. Here, briefly, are factors to consider in anticipating any future oil shock:

1. China hedging on oil. Apparently, the Chinese are shifting investments allocated from their sovereign wealth fund from U.S. Treasury bills to commodities, including oil. With a sharp drop in exports only partially redressed by a stimulus-funded drive at boosting domestic consumption, it appears that China is building up an oil reserve in anticipation that this commodity will eventually rise greatly in price, simultaneously with the future depreciation of the American dollar. Should China’s oil hoarding increase in tempo, a significant upside in the price of petroleum will become highly probable.
2. Political instability in the Persian Gulf. The political upheaval occurring in Iran in the aftermath of a presidential election widely perceived by the Iranian people to have been rigged has an unpredictable dynamic. However, most scenarios, either involving prolonged violence or the perpetuation of a radical regime committed to acquiring nuclear weapons, will likely facilitate events that will impact the supply of oil from the most energy-intensive real estate on the planet. Even the mere perception that things might go bad will be enough to drive up the price of oil. Actual events, including internal and external violence, will impose a significantly higher cost penalty.
3. A terrorist attack involving a strategic target related to the oil industry. Al-Qaeda is well aware of the vulnerability of the global economy, at a time of profound financial and economic crisis, to a targeted attack on a vital element related to the oil industry. Only one single but highly significant target would be enough to send the price of oil to a much higher level. Unfortunately, Al-Qaeda and its allies have many choices to select from a menu of targets. In terms of extraction, transportation to consumers as well as refining and storage infrastructure, there are literally thousands of targets across the globe, any one of which would prove impactful to the stability of oil prices. It would be unduly optimistic to assume that Al-Qaeda is not focussed on such an objective, or that security forces are so effective that they can protect every possible target.

The fall in oil prices from their record highs of last summer amounts to, in effect, a tangible economic stimulus program. Unlike government stimulus spending programs, the fall in oil prices required no deficits, and meant an immediate infusion of money into the pockets of private and corporate consumers. Conversely, the return to higher energy prices at a time in which the world is experiencing its worst economic crisis since the Great Depression of the 1930s would, in terms of impact, be a major tax penalty being imposed on any attempt at a sustained recovery. In essence, the entire global economy is being held hostage to the volatile pricing forces of an essential commodity. Clearly, when it comes to oil price levels, the market does indeed rule.

President Barack Obama has long been opposed to the military adventure in Iraq, on the grounds that it had dangerously distracted the United States from focusing on crushing Al-Qaeda and its allies in Afghanistan. History has already validated Obama’s assessment on what the correct priority should have been for the U.S. armed forces. The question now facing Obama and his administration is what strategy to pursue in Afghanistan. The fragments that have emerged so far seem to indicate two trends; modestly reinforce the U.S. troop presence in Afghanistan, while linking the Taliban and Al-Qaeda presence in neighboring Pakistan to the overall theater of operations.

Will President Obama’s approach on Afghanistan prove more efficacious than that of George W. Bush? The lessons of history raise doubts that deserve serious reflection. The United States has not had a stellar record in winning wars against determined insurgents fighting a fierce guerrilla war. Vietnam is a conspicuous reminder that even hundreds of thousands of American troops, backed by massive technical means and a powerful airforce, cannot guarantee victory.

There is a voice from the distant past who has something to say that is highly relevant to the military challenges facing the U.S. military in Afghanistan. The Swiss military theoretician, Antoine Henri Jomini, served as a senior staff officer in Napoleon’s army during the Peninsular War. This brutal, conflict, fought on the Iberian Peninsula, began with the occupation of Spain by the French army. The population revolted, leading to a savage conflict that gave rise to the term “guerrilla war.” The British sent a small but well disciplined professional army to aid the Spanish insurgents, under the command of the Duke of Wellington. In five years the combined army of Spanish guerrillas and British regular troops utterly defeated the French. Napoleon’s defeat in the Peninsular War, combined with his forced retreat from Russia, brought about his ultimate downfall.

When writing his seminal work, “Art of War,” Jomini applied the lessons he had learned during the Peninsular War to form general principals and doctrine on guerrilla and insurgent conflicts. The principals he laid down align with the American experience in Afghanistan with chilling relevance.

“When the people are supported by a considerable nucleus of disciplined troops, the difficulties are particularly great,” wrote Jomini. “The invader has only an army, whereas his adversaries have both an army and a people in arms, making means of resistance out of everything and with each individual conspiring against the common enemy.”

With centuries of virtually uninterrupted warfare, including a brutal Soviet occupation that the Afghans successfully resisted, a large component of the country’s male population is well trained in small arms tactics, making expert use of their land’s barren and mountainous terrain. Just as Wellington’s troops added stiffening to the ranks of the Spanish guerrilla fighters, there exists a large corps of veteran fighters, including commanders, that multiplies the effectiveness of the younger insurgents joining the ranks of the Taliban in sufficient numbers to extend the conflict indefinitely.

Jomini provides a description of what he learned about insurgencies in the Peninsular War, lessons that are applicable two centuries later in the mountains of Afghanistan:

“These obstacles become almost insurmountable when the country is difficult. Each armed inhabitant knows the smallest paths and their connections; he finds everywhere a relative or friend who aids him. The commanders also know the country and, learning immediately the slightest movement on the part of the invader, can adopt the best measures to defeat his projects. The enemy, without information of their movements and not in a condition to reconnoiter, having no resource but in his bayonets and certain of safety only in the concentration of his columns, is like a blind man. His combinations are failures. When, after the most carefully concerted movements and the most rapid and fatiguing marches he thinks he is about to accomplish his aim and deal a terrible blow, he finds no signs of the enemy but his campfires. So while, like Don Quixote, he is attacking windmills, his adversary is on his line of communications, destroys the detachments left to guard it, surprises his convoys and his depots, and carries on a war so disastrous for the invader that he must inevitably yield after a time.”

Unless President Barack Obama restores the military draft, raises an army of several hundred thousand soldiers to occupy and guard every vital installation in Afghanistan, and convinces the American people that they must sustain such a massive occupation for possibly decades, and accept substantial casualties and massively increased military expenditures, he will lack the means to challenge the insurgency in a decisive manner. As commander in chief, therefore, Obama is faced with two choices. He either maintains the status quo with slightly more troops, which will mean only prolonged stalemate. Or he can refocus U.S. objectives on the limited goal of ensuring Afghanistan never again allows its territory to be used as a base to attack the United States.

The first choice only promises a higher list of dead and maimed Americans, and frightful expenditures at a time of profound economic and financial crisis. The latter choice opens up the possibility of a negotiated resolution of the conflict, leading to the attainment of U.S. national security objectives without the permanent occupation of a land historically hostile to all foreign armies.

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It has been nearly eight years since Al-Qaeda struck the United States on September 11, 2001. In the aftermath of that transformational event, some have speculated that a future strike on the U.S. by Osama bin Laden would be more devastating, involving perhaps a nuclear weapon. This apocalyptic scenario has been the plot of various novels, including my own nuclear terrorism thriller, “King of Bombs” (information at http://www.kingofbombs.com). However, the passage of nearly a decade has lulled some into a state of complacency. Could it be that George W. Bush and Dick Cheney were right in deciding to invade Iraq? After all, it was their rationale (after no weapons of mass destruction were found) that fighting in Iraq meant the United States did not have to fight Al-Qaeda in the homeland. Could that be why Al-Qaeda has not launched a second attack on the homeland, after eight years?

In evaluating the possibility of future Al-Qaeda operations in the United States, it is useful to look back at an earlier plot that predated 9/11. On February 26, 1993 an Islamist radical cell linked to what would eventually be known as Al-Qaeda detonated 1,500 pounds of explosive material, consisting of oil and nitrates, in the underground parking garage at the World Trade Center. The resulting explosion killed six and injured more than 1,000. As destructive as this attack was, it did not fulfill the tactical and strategic objectives of the perpetrators.

The intention of the attackers was to bring down one of the Twin Towers in such as manner that it would topple over its twin, resulting in mass casualties and destruction. However, many mistakes were made by the plotters, ensuring that the detonation would not bring about the collapse of the building, while leaving a trail of forensic clues which would lead to the eventual apprehension of most of the plotters of the attack.

It would be more than eight years before Al-Qaeda struck again, with vastly more devastating results. Until 9/11, there was a level of complacency that inhibited American policymakers from correctly evaluating the threat of a jihadist cell striking at the American homeland, despite repeated and successful Al-Qaeda attacks directed at American targets overseas. This intellectual myopia on the part of U.S. decision-makers would be described in the official report of the bipartisan 9/11 Commission as a “failure of imagination.” Could history be repeating itself?

The American government, during the Clinton and subsequent Bush administrations, failed to recognize that Al-Qaeda was a transnational terrorist organization unlike any other. Furthermore, policymakers ignored clear threats by the leadership of Al-Qaeda to attack the American homeland. Several of these warning were issued personally by Osama bin-Laden to international journalists.

Since 9/11, Al-Qaeda has launched dozens of attacks throughout the world. This figure does not include Iraq and Afghanistan, where the number certainly runs into the hundreds, if not thousands. The jihadist followers of Osama bin-Laden have struck targets in diverse regions including Europe, North and East Africa, Turkey, the Philippines and Indonesia. On October 12, 2002 a jihadist group linked to Al-Qaeda attacked three targets on the Indonesian Island of Bali, including a bar frequented by European and Australian tourists, killing more than 200. On March 11, 2004 Al-Qaeda set off multiple bombs on Spanish trains in Madrid, killing nearly 200. On July 7, 2005 Al-Qaeda operatives trained in Pakistan detonated bombs that struck London’s transit system, resulting in 52 fatalities and hundreds of injuries. These are but a few of a long list of murderous terrorist operations successfully carried out by Al-Qaeda since 9/11.

Based solely on operational tempo, Al-Qaeda’s capability to mount attacks worldwide appears intact. There are indications that it may even have grown substantially. Experts who monitor Al-Qaeda believe two factors have contributed to the enhancement of this terrorist organization’s capacity. In the first place, Al-Qaeda has developed a sophisticated capability to utilize the Internet as a recruitment tool as well as an operational asset. Thousands of jihadist websites spread the message of Osama bin-Laden’s Islamist ideology to a large segment of disaffected Muslims, especially among immigrants in Europe. Secondly, the Iraq war is believed by many to have energized Al-Qaeda, and attracted support and sympathy throughout the Islamic world.

Some defenders of the Bush administration’s decision to invade and occupy Iraq maintain that the war has made America safer, by attracting jihadists who would otherwise come to America to wage warfare. However, in testimony before the Senate Select Committee on Intelligence in 2005, then CIA Director Porter J. Goss stated that, “these jihadists who survive will leave Iraq experienced and focused on acts of urban terrorism. They represent a potential pool of contacts to build transnational terrorist cells, groups and networks.”

In 2007 the National Intelligence Estimate, reflecting the consensus view of America’s intelligence gathering agencies, concluded that Al-Qaeda had reconstituted its command and control infrastructure in sanctuary areas inside Pakistan, astride the border with Afghanistan. Ominously, the NIE concluded that:

“We assess that Al-Qaeda’s homeland plotting is likely to continue to focus on prominent political, economic, and infrastructure targets with the goal of producing mass casualties, visually dramatic destruction, significant economic aftershocks, and/or fear among the U.S. population. The group is proficient with conventional small arms and improvised explosive devices, and is innovative in creating new capabilities and overcoming security obstacles. We assess that Al-Qaeda will continue to try to acquire and employ chemical, biological, radiological, or nuclear material in attacks and would not hesitate to use them if it develops what it deems is sufficient capability.”

Looking back at the 8-year interval between the attacks on the World Trade Center and the subsequent eight years, we observe a number of key characteristics about Al-Qaeda and its leadership. Osama bin-Laden and his deputy, Ayman al-Zawahiri, are utterly committed to the victory of their interpretation of Islam, which means the reestablishment of a united Islamic caliphate ruled under strict shariah law. An essential preliminary to achieving this historic triumph, in their view, is the expulsion of all “infidel” influence within the Islamic world, meaning principally the United States, and the emasculation of America’s economic power. While this goal seems preposterous to an American mind, within the context of Islamist radicalism Osama bin-Laden has articulated a rational and cogent strategy for achieving his aims.

Al-Qaeda and its senior leadership think in terms of a long timeframe for achieving their goals. Patience characterizes their operational planning, particularly involving major targets. Thus, in their mode of thinking, eight years was a reasonable period of time to improve upon their first attack on the World Trade Center mounted in 1993.

The 9/11 attack displayed ruthless execution and bold planning. It also established a benchmark for future attacks on America, with a far higher threshold of destruction required then what Al-Qaeda customarily inflicts during its attacks in Europe, Africa, the Middle East and Indonesia. Anytime since 9/11, Al-Qaeda could have attacked transit systems, shopping malls and other “soft targets” in the United States. However, such terrorist incidents would be purely tactical, lacking any strategic consequences. Al-Qaeda has probably determined that any future attack on America, to be viewed as successful and strategic, must exceed the level of carnage inflicted on 9/11 by a significant degree. That is probably why the National Intelligence Estimate released in 2007 emphasized the likelihood that Al-Qaeda is planning to hit the American homeland again, possibly with a weapon of mass destruction.

When Osama bin-Laden attacked the World Trade Center and Pentagon on 9/11, he had a strategic objective clearly in mind. Mass casualties were the means to his goal, rather then the ends. By inflicting a shock on the American psyche of such dramatic proportions, he sought to induce the United States to militarily intervene in Afghanistan, repeating the experience of the former Soviet Union. He anticipated that a long, drawn-out war of attrition would demoralize the United States, cripple her economy and lead to its collapse, replicating what occurred to the Soviet Union. What he did not anticipate was that the U.S. would only send a small expeditionary force to Afghanistan, while devoting the bulk of its military resources towards the subjugation of Iraq, whose ruling regime had no connection with the events of September 11, 2001. In that sense, the strategic value of the consequences of 9/11 for Al-Qaeda probably exceeded their highest expectations.

In planning for its next attack on the United States, Al-Qaeda would seek to inflict a loss of such staggering proportions that it would again impel the United States into behaviors that would serve its ultimate existential goals. To achieve such an aim with conventional means, such as ordinary explosives or airplanes (as on 9/11) is probably an unlikely scenario. As suggested by the NIE on Al-Qaeda planning for a future operation on U.S. soil, it is likely that Osama bin-Laden is exploring ways of utilizing a weapon of mass destruction in a future attack.

The NIE speculates on the means of WMD that Al-Qaeda may be focusing on. Though biological and chemical weapons are possibilities, they are unlikely to be used by Al-Qaeda. These weapons are notoriously difficult to employ, as demonstrated in a terrorist attack on the Tokyo subway involving nerve gas. More importantly, while such weapons may, under certain circumstances, be deadly, they limit their effect to people, while leaving property intact. Al-Qaeda’s methodology and doctrine stresses physical damage along with loss of human life. The iconic image of the twin towers dissolving on 9/11 was more valuable to Al-Qaeda then the actual number of fatalities. For those same reasons, a radiological weapon, commonly dubbed a “dirty bomb,” also would not be of much interest to Al-Qaeda.

If Al-Qaeda is planning a future attack on America that will exceed 9/11 in its impact, there is a high probability that this operation would involve the detonation of a nuclear weapon in a major urban center within the continental United States. The capacity for even a crude nuclear weapon to inflict vast carnage and destruction within a densely populated city is unmatched by any other weapon or scenario that Al-Qaeda could conceivably employ. Captured documents and other anecdotal information point to a very high level of longstanding interest by Osama bin Laden in nuclear weapons.

In recent years, both Osama bin-Laden and Ayman al-Zawahiri have issued repeated warnings that America would face attacks worse than 9/11, unless it fulfilled all of Al-Qaeda’s demands, including withdrawal of its physical presence from anywhere defined as Islamic territory. In an Internet broadcast message, al-Zawahiri warned, “You are facing the Islamic rage … what awaits you, should you press on, is far worse than anything you have seen.”

In a macabre video marking the sixth anniversary of 9/11, Osama bin Laden offered a chilling message. Warning the American people that they were responsible for the continuation of the Iraq war by virtue of having reelected President Bush, he went on to propose two alternatives for ending America’s involvement in Iraq: “The first is from our side, and it is to continue to escalate the killing and fighting against you. The second way is to reject America’s democratic system and convert to Islam…I invite you to embrace Islam.”

By fulfilling all of the theological requirements for a future attack on America, it appears that Osama bin-Laden is laying the groundwork for something “far worse” than 9/11. While his call for Americans to “embrace Islam” seems irrational to a Western mindset, in the context of Osama bin-Laden’s world this is a supremely rational act for a jihadist warrior to undertake. Having provided fair warning and an opportunity to convert to his enemy, he no longer feels any moral restraint on inflicting the ultimate destruction on the American homeland.

As reflected in the NIE referred to earlier, the American intelligence community has high confidence that if Al-Qaeda ever acquired a nuclear weapon, they would unquestionably use it against an American target. Those within leadership circles who downplay the threat of nuclear terrorism from Al-Qaeda claim that it is beyond the capability of Al-Qaeda to manufacture or otherwise obtain such weapons. Unfortunately, there is much expert opinion that holds a contrary view.

It may be difficult for Al-Qaeda to acquire an intact nuclear weapon, though not inconceivable. It is known that during the break-up of the former Soviet Union, much of that nation’s nuclear arsenal was insecure. Rumors have circulated for many years that during that chaotic period, Al-Qaeda obtained several Soviet nuclear weapons through the black market. It is impossible to know if that in fact happened, though another possible source of intact nuclear weapons is Pakistan, a nuclear-armed state that happens to be where the top Al-Qaeda leadership is believed to be in hiding. At present, a radical Islamist uprising is underway in significant parts of Pakistan, eroding the stability of the nation’s fledgling civilian government.

A more likely scenario involves Al-Qaeda making its own nuclear bombs. Though challenging, this would be within the capability of an organization with the proven sophistication of Al-Qaeda. Much of the information on making nuclear devices is within the public domain, and it is known that Osama bin-Laden met personally with two senior scientists involved with Pakistan’s nuclear weapons establishment, prior to 9/11. The barrier to building a nuclear bomb is not technical know-how but materials. Atomic weapons require fissile materials, either uranium 235 or plutonium. These materials require a national industrial infrastructure to create, so Al-Qaeda cannot fabricate fissile materials on its own.

Unfortunately, with the collapse of the Soviet Union, a vast quantity of fissile materials became dangerously insecure, vulnerable to theft or being sold by the Russian Mafia. The U.S. Congress recognized the danger, and provided funding for a program that assists the Russians in improving security at facilities that store nuclear weapons and fissile materials. In the many years that this program has been in existence, only half of the insecure Russian nuclear sites have had their security upgraded. At the present rate of funding and implementation, it may be another 10 years before the remaining nuclear sites are secure, though the Obama administration has demonstrated a far higher level of concern on this issue than the previous Bush presidency. In addition, there are many other sites throughout the world, including the United States, which store fissile materials under less than optimum security. It would be an act of extreme optimism to believe that Al-Qaeda will sit and wait ten years until all these nuclear sites have upgraded their security arrangements. Possibly, Al-Qaeda might already have such materials in its possession. Depending on the design of the bomb, as little as 35 pounds of uranium 235 would be needed to build a device with a yield similar to the weapon that destroyed Hiroshima in 1945. Should Al-Qaeda actually build such a weapon, it is highly unlikely that it would be detected by present security protocols and technology, should a jihadist cell seek to surreptitiously insert it into the United States. Contrary to public perception, nuclear weapons emit little radiation, which can be easily shielded. Once inside American borders, Al-Qaeda could deliver a nuclear bomb to any city by van or SUV.

Should a nuclear bomb ever be detonated in an American city, the carnage would defy our imagination. It is estimated that a ten-kiloton device, less powerful than the Hiroshima bomb, detonated in mid-town Manhattan during the workday, would immediately kill approximately 500,000 people. A similar number would be fated to die in the following days and weeks from the effects of radiation poisoning. Beyond the immensity of the carnage and destruction, America would be irreversibly transformed. Fear would dominate the country, with tens of millions of Americans contemplating the evacuation of their cities, uncertain if other bombs exist and would be detonated. Economic paralysis would ensue as the borders closed, while the financial markets, already weakened by the current Global Economic Crisis, would completely collapse. Civil liberties would be largely suspended, as the nation entered a new Dark Age, in which survival would take precedence over liberty. Likely, America’s relationship with the world would be radically transformed in manner that suited Al-Qaeda’s ultimate agenda.

In an interview conducted with the journalist Robert Fisk in 1997, Osama bin-Laden made his ultimate objective regarding the United States unambiguously clear. “I pray to God that He permits us to turn America into a shadow of itself,” the Al-Qaeda leader told Fisk.

While knowledgeable national security specialists take seriously the threat of weapons of mass destruction being employed in any future Al-Qaeda atrocity on American soil, outside their small circle this vital issue of national survival has barely seeped into the public consciousness Yet, should Al-Qaeda actually detonate a nuclear weapon in an American city, the entire world as we know it would cease to exist.

Ayamn al-Zawahiri, the number 2 leader of Al-Qaida, spoke in a new video, where he added his own commentary on the global economic crisis. He specifically called on the American people to convert to Islam, which he claimed would enable them to recover from the economic and financial meltdown that has afflicted the United States and much of the world. According to al-Zawahiri, American actions since September. 11, 2001 have emptied the U.S. Treasury.

Ayman al-Zawahiri, whose 80-minute recording touched on a multitude of subjects, also lashed out at Afghanistan’s government and said any U.S. gains in Iraq will be temporary.

In his 80 minute video appearance, al-Zawahiri claimed that the roots of the U.S. and global economic crisis were in U.S. actions precipitated by 9/11.”The American economy was afflicted by a downturn and loss of investor confidence in the market following the events of September. 11,” said Al-Qaeda’s number 2.

“The modern economy has been destroyed by the strikes of the mujahedeen (in Iraq and Afghanistan) and the usury,” said Al-Zawahiri, who then called on the American people to embrace the Muslim faith, which he suggested would enable them, “to live a life free of greed, exploitation and forbidden wealth.” It is unclear if Al-Qaeda believes many Americans will accept its economic prescription for solving the financial crisis.