Robert Reich speaks on war economics
With his speech entitled The War on Terrorism: Economic Consequences former secretary of labor under President Clinton, Robert Reich addressed many of the present day concerns Americans have about a pending war in Iraq.
Reich began his speech by highlighting Americans' two most important concerns according to recent polls: a shaky economy and a possible war overseas. He stated that these issues have been compartmentalized, that is, the relationships between the two issues have not been given much attention and are seen as isolated incidents.
He addressed three particular ways the war against terrorism and the pending war on Iraq have affected the economy of the United States as well as the global economy.
Reich first discussed the public's concern with the budget and the infamous "guns vs. butter" debate, which centered around the effect a military war would have on the homeland budget. Reich drew parallels between the late 60s to early 70s and today, noting that then inflation skyrocketed around the time of the war in Vietnam. "But that is a different circumstance than if you are dealing with an underutilized economy, like we have now." Pointing to the underutilized capacity of factories and industries and their production value combined with a low unemployment rate around 5.8 percent, "Mr. Reich stated that under our circumstances, "having a lot of military spending may not take away from the country's capacity to do a lot of other domestic things should we wish to do so." In other words, deficits are not necessarily bad when there is an underutilized capacity and the risk of inflation is less of a threat.
Secondly, he found the real problem to lie in the post 9/11 increased closing of America's borders on all fronts. "With the movement of goods, the movement of people, the movement even into our ports: it is harder to simply move things into the United States, it is harder for people to get into the United States." Thus, this presents a threat to our global economic system. Reich went on to state that, at its basic structure, globalization depends on global integration in terms of products, materials, and global investments, which is inhibited when the movement of people and goods across borders is threatened.
"Post 9/11 we find a fundamental shift in our political thinking about immigrants," he said. In the advent of racial profiling, many civil liberties are violated, inhibiting the flow of immigrants and future workers through our borders. Reich, as an advocate for the liberalization of U.S. borders prior to 9/11, found that those individuals who were driven to become U.S. citizens have the dual capacity of hard work and commitment.
A third problem Mr. Reich addressed concerned the practices of the current administration's militarization of foreign policy and the combined unilateralism on many issues concerned with foreign policy. "But when the current administration says 'No' to almost every international treaty that comes its way-whether we are talking about Kyoto, global warming, the anti-proliferation of nuclear and chemical weapons, or we are talking about a treaty with regards to international criminal court-whatever the treaty is, this administration has essentially said no." And in this sense, Reich highlighted a second problem that has occurred in regards to the doctrine of unilateral preemption that the current administration has taken towards global treaties.
In both cases, Mr. Reich pointed to issues that seem to be a detriment to the global economy and globalization in general: first, the closing of borders and, second, the attitude of unilateralism in foreign policy. He predicted long-term effects that might indicate the beginning stages of a direct retreat from globalization. "At a time of international terror this may be the wrong way to go."