Ephemerides (August 2002)
August 31, 2001
Yesterday a friend lent me a recent issue of The Spectator, the organ of the snooty British Right, with which to pass the time on a long train ride. The first article that I happened to flip to was a screed by Taki Takeitupyournos, who will soon be joining Pat Buchanan to launch The American Conservative. (Vide Franklin Foer, "Buchanan's Surefire Flop".) What was burdening Taki's coke-soaked brain this week (there may be a link somewhere, but I'm not going to hunt for it) was the modern application of Bismarck's dictum that the Balkans were not worth the bones of a single Pomeranian grenadier. Taki feels the same way about Iraq. Indeed he is unhappy about the fact that "Uncle Sam seems to be everywhere, from Columbia to the Philippines, the Middle East, Pakistan, Afghanistan, India, North Korea, you name it, Sammy's involved." And "with Sharon calling the tune", to boot.
Since it would be too much of a strain on the powdery white cells to offer an actual argument against America's anti-terrorist activism, Taki turns to the increasingly popular ploy of hurling insults at advocates of the War on Terror. His refrain is not original: "Basically, it's armchair warriors such as William Kristol, John Podhoretz and Mark Steyn, to name just a few, who gave Pat, Scott [McConnell] and me the idea to start a mag. There are many such heroes in America right now, all ready to fight, as long, of course, as others are doing the fighting."
The "cowardly hawk" riff has been with us at least since Vietnam. For all I know, Taki, Pat & Co. will extend it back to World War II, when the wheelchair-bound FDR enjoyed a sure-fire draft exemption. (Most likely, they will. In the essay at hand, Taki expresses unstinted admiration for the Japanese kamikazes and claims that "the grotesque FDR forced the imperial army to attack Pearl Harbor".)
Others have pointed out how ridiculous it is to assert that no one has the right to advocate going to war unless he, personally, will be on the front lines. What I'd like to add is that, even if that argument had a modicum of cogency in ordinary wars, it is quite obsolete as applied to the one that we are in now, where our enemies are mostly not conventional states and do not recognize civilized constraints on the use of violence.
As the Israelis have known for a long time, informed by incidents like the murder of Tourism Minister Rechavam Ze'evi, there is no front line in a conflict with terrorists. People who would not normally be called up for military duty - old men, children, women, homosexuals - are regarded by al-Qaeda, Hamas, etc. as proper targets. The "armchair warriors" whom Taki derides may not be asked to march on Baghdad, but they are exposed to retaliation by Saddam Hussein's friends, and their outspoken enmity toward the terrorists surely does not decrease their risk.
Maybe, if we're going to reduce questions of war and peace to ad hominem flaming, we should ask whether the doves haven't been intimidated by Osama bin Laden. Are they hoping to avert al-Qaeda's wrath by raising their voices in behalf of surrender?
It would be best, of course, for everybody to avoid speculation about motives, and about who is brave and who is not. Whether Iraq is worth the bones of American grenadiers or Greco-British journalists turns on whether toppling the Ba'athist tyranny will or will not advance the cause of defending civilization against barbarism. If the doves have anything useful to say on that score, let them say it and reserve the insults for less crucial debates.
August 24, 2002
Secret Terror Court Rebukes U.S.
Justice Department accused of repeatedly lying to obtain warants, wiretaps
That sounds pretty terrible, and nothing in the accompanying story (reprinted from the Washington Post) ameliorates the unfavorable impression. Many Tribune readers, I'm sure, now believe that a federal court has caught John Ashbrook and his minions committing perjury in order to obtain authorization to probe the lives of innocent Moslems.
Only by reading other news stories (e. g., from ABC News) or the court's opinion (2.3 MB PDF file) does one learn that the most of the misconduct rebuked by the Foreign Intelligence Surveillance Court occurred before September 2000 and the rest before March 2001 (not "over the last two years", as the Post/Tribune story falsely states). John Ashbrook was sworn in as Attorney General on March 18, 2001. After he took office, the court notes, FBI procedures were revised to reduce the risk of similar problems in the future.
Of greater significance is the nature of the false information submitted to the court. "In almost every instance, the government's misstatements and omissions in FISA [Foreign Intelligence Surveillance Act of 1978] applications and violations of the Court's orders involved information sharing and unauthorized disseminations to criminal investigators and prosecutors."
Lying to a judge is, of course, a serious matter (even if one prominent member of the last Administration thought otherwise), but the falsehoods here were of a different order from what the Tribune headline claims. According to the court's opinion, FBI counter-intelligence personnel shared the fruits of their searches and wiretaps with colleagues who were investigating criminal activity, in violation of FISA's "wall" between the two types of investigation. No one is alleged to have invented "facts" to mislead judges about the substantive merits of FISA applications.
We should not stop, however, with the obvious moral about media bias. The dispute over exactly how the FBI is supposed to handle intelligence data points up why America cannot, in the long run, "play defense" against terrorism.
FISA (enacted, let us note, by a Democratic President and Congress) makes it possible for federal law enforcement authorities to obtain search and wiretap warrants without meeting the Fourth Amendment standard of "probable cause". The justification is that FISA warrants are not intended for use in solving crimes, which is why the "wall" between counter-intelligence and criminal investigations was established.
One needn't be a fanatic civil libertarian to observe that the Constitutional standard applies, on its face, to all warrants. The Fourth Amendment does not say, "no Warrants shall issue in criminal cases, but upon probable cause". A non-fanatic may also reflect that it would be unpleasant to have the government listening in on one's private conversations, regardless of whether it could use what it heard in a criminal prosecution. FISA bends Constitutional proprieties about as far as possible, short of tossing out the principle that the Bill of Rights is worth a moderate amount of inconvenience and danger.
So long as organized terrorism remains a real threat, our country will be forced to make uneasy compromises between public safety and Constitutional safeguards, probably to the detriment of both. I don't fear that we will drift into a dictatorship. As James Taranto has ably argued ("The New Red Scare"), dictatorships arise from the actions of politicians, not policemen. The danger, rather, is that the government will become intrusive enough to interfere with our private lives without becoming effective enough to protect us from terrorists.
The way to combat that danger is to cut the period of defense as short as possible by relentlessly taking the offensive. Effective modern terrorism requires offices, bases, bank accounts, computers, weaponry, chains of command. Without them, isolated killers like Timothy McVeigh and the Unabomber are minor threats. We should be working to shred the networks of al-Qaeda, Hamas, Hezbollah, Islamic Jihad, FARC, the IRA and their kindred. We can never make the world 100 percent risk-free, but it can once again become safe enough to let us go back to the days when one could get onto an airplane without passing through metal detectors and there was no need for a Foreign Intelligence Surveillance Court.
Since the invasion of Iraq and overthrow of Saddam Hussein are the best available jump-off for a vigorous anti-terrorist strategy, those who advocate it are the true friends of civil liberties. Anyone who wants to sit on our hands and wait for a worldwide consensus is asking for a future in which the Tribune's mendacious headline may eventually come true.
August 17, 2002
Brent Scowcroft is a foreign policy “realist”, in the “if it tastes bad, it must be good for you” sense. He was for preserving the Soviet Union, against supporting Boris Yeltsin during the attempted communist coup, for leaving Saddam Hussein in power in 1991, against attacking the Taliban last year. His exhortation in last Thursday’s Wall Street Journal, “Don’t Attack Saddam”, is in the same vein.
Superficial minds may believe that getting rid of the Iraqi tyrant is a good idea, for reasons that General Scowcroft himself outlines:
It is beyond dispute that Saddam Hussein is a menace. He terrorizes and brutalizes his own people. He has launched war on two of his neighbors. He devotes enormous effort to rebuilding his military forces and equipping them with weapons of mass destruction. We will all be better off when he is gone.
But the general doesn’t like the idea of doing anything to hasten that exit. His realpolitik-oid case for retaining the Iraqi status quo rests on three propositions: first, that Saddam has no motive to support terrorism; second, that the United States needs “enthusiastic international cooperation” in order to defeat its terrorist enemies; third, that invading Iraq “would result in a serious degradation in international cooperation with us against terrorism”. All of that sounds hard-headed. Almost none of it makes sense as political realism.
Few will disagree with General Scowcroft’s initial statement that “Saddam's strategic objective appears to be to dominate the Persian Gulf, to control oil from the region, or both. That clearly poses a real threat to key U.S. interests.” From that beginning he immediately draws a more questionable inference:
But there is scant evidence to tie Saddam to terrorist organizations, and even less to the Sept. 11 attacks. Indeed Saddam's goals have little in common with the terrorists who threaten us, and there is little incentive for him to make common cause with them.
Why not? The United States is the principal obstacle to Iraq’s restoration to its former place as a major regional power. American and British warplanes enforce no-fly zones over much of the country, regularly attack its air defense installations, and shelter the quasi-independent Kurdish region from reconquest. The U.S. is also the main proponent of economic sanctions against Baghdad, which would have been lifted long ago but for our insistence that they stay in place. Whatever hopes Saddam has of achieving any strategic objective rest on pushing America out of the Middle East, a goal that he lacks the remotest ability to achieve on his own.
Quite conveniently, eliminating the American presence in the Middle East is a strategic objective of al-Qaeda, Hamas, Hezbollah and other anti-Western terrorist groups. While Saddam is a secularist who doesn’t, except in occasional bursts of rhetoric, share the theology of the Islamofascists, the most basic principle of realpolitik is “the enemy of my enemy is my friend”. Saddam has the strongest imaginable incentives to make common cause with those who are currently fighting America and its ally Israel. That he recognizes that commonality of interest is shown by his payment of reward money to the families of Palestinian suicide bombers and his threats to equip them with biological weaponry. General Scowcroft thinks that fear of retaliation will keep him from carrying out that threat and, indeed, from any use of weapons of mass destruction as a deterrent to American power:
He is unlikely to risk his investment in weapons of mass destruction, much less his country, by handing such weapons to terrorists who would use them for their own purposes [which run parallel to his own, so why would that bother him?] and leave Baghdad as the return address [though “world opinion” will doubtless insist that the address has been forged or misread]. Threatening to use these weapons for blackmail--much less their actual use--would open him and his entire regime to a devastating response by the U.S.
Immediately after denying that Saddam would dare “to use these weapons for blackmail”, General Scowcroft tells us that their purpose is “to deter us from intervening to block his aggressive designs”. Blackmail and deterrence are, in this context, the same idea. It is scarcely consistent to say that Saddam wants weapons as a deterrent but will be afraid to use them to deter. His actual expectation, I imagine, is that, if he obtains nuclear, biological or chemical weapons, the U.S. will be too decadent and cowardly to fight him - and that “realistic” analysts like Brent Scowcroft will see dire risks in doing so.
The most striking lacuna in General Scowcroft’s analysis of Saddam’s intentions is the failure to give any weight to Iraq’s refusal to abide by the terms on which the Coalition stopped fighting in 1991. Under the cease fire accords, U.N. weapons inspectors have the right to move freely within the country and Coalition forces have free access to Iraqi air space. Saddam constantly hindered the work of the inspectors before expelling them altogether four years ago, and his army regularly fires at Coalition aircraft. Our acceptance of that behavior can only encourage our enemies to continue resisting even after ostensible acquiescence in defeat, thus making it harder ever to bring a war to a conclusion. If there were no other reason for deposing Saddam, his violation of the conditions on which he was allowed to hold onto power would be casus belli enough, particularly from a realpolitik perspective. Oddly enough, General Scowcroft, at the very end of his essay, approaches recognition of this principle:
In any event, we should be pressing the United Nations Security Council to insist on an effective no-notice inspection regime for Iraq--any time, anywhere, no permission required. On this point, senior administration officials have opined that Saddam Hussein would never agree to such an inspection regime. But if he did, inspections would serve to keep him off balance and under close observation, even if all his weapons of mass destruction capabilities were not uncovered. And if he refused, his rejection could provide the persuasive casus belli which many claim we do not now have.
A “no-notice inspection regime” is what the United States and the U.N. did insist on from 1991 through 1998. Saddam, despite the promises made at the time of the Gulf War cease fire, refused to cooperate. That rejection evidently doesn’t count as a “persuasive casus belli”. Why not?
Turning to General Scowcroft’s second premise, “enthusiastic international cooperation” in the war on terrorism is much to be wished for. There are, alas, no signs that any major Arab country in the Middle East is giving it. Still, they could do less, and the general thinks that, if we were to move against Saddam, they would.
Possibly the most dire consequences would be the effect in the region. The shared view in the region is that Iraq is principally an obsession of the U.S. The obsession of the region, however, is the Israeli-Palestinian conflict. If we were seen to be turning our backs on that bitter conflict--which the region, rightly or wrongly, perceives to be clearly within our power to resolve--in order to go after Iraq, there would be an explosion of outrage against us. We would be seen as ignoring a key interest of the Muslim world in order to satisfy what is seen to be a narrow American interest.
Even without Israeli involvement, the results could well destabilize Arab regimes in the region, ironically facilitating one of Saddam's strategic objectives. At a minimum, it would stifle any cooperation on terrorism, and could even swell the ranks of the terrorists. Conversely, the more progress we make in the war on terrorism, and the more we are seen to be committed to resolving the Israel-Palestinian issue, the greater will be the international support for going after Saddam.
In terms of power politics, this reading of the views of the Middle Eastern states is singularly odd. They are the targets of Saddam Hussein’s expansionist ambitions. He has actually invaded Iran, Kuwait and Saudi-controlled Arabia. He would, General Scowcroft would doubtless agree, do so again if American power did not constrain him. And yet, we are told, the region is uninterested in getting rid of him; instead, its “obsession” is with Israel, a nation that has no desire to expand beyond its present boundaries, has never committed aggression against any other country, and has returned large tracts of territory that it gained in wars launched against it by its neighbors.
An uncompromising realist, faced with such a sharp divergence between national interests and national policies, would reexamine his interpretation of each. If Middle Eastern governments would be outraged by an American invasion of Iraq, that reaction suggests that they regard Saddam Hussein as a friend rather than a foe. The only sense in which hostilities against Iraq would be tantamount to “turning our backs on” the Israeli-Palestinian conflict is that we would be destroying a regime that strongly supports the Palestinian Authority, which, in turn, is strongly allied to the leading terrorist movements. In short, by General Scowcroft’s own reasoning, the Arab objection to our attacking Saddam Hussein is that he, they and the terrorists are all on the same side. If that is the Arab governments’ attitude, how much willing cooperation in combating terrorism can we anticipate? The ineluctable truth is that Saudi-controlled Arabia, Egypt, Syria, Jordan et al. assist us, to the extent that they do, out of fear of our wrath rather than shared opposition to terrorist philosophy and tactics.
If such is the case, two further realpolitik inferences are unavoidable: (1) Assistance extorted through fear is not reliable. General Scowcroft calls for “progress” in the war on terrorism but does not explain where and how we will make it so long as we depend upon unwilling allies. (2) In the absence of firmly committed Arab friends, the U.S. must deploy its own forces to the Middle East to destroy the terrorists’ infrastructure, capture or kill their leaders, and intimidate states that harbor them. A friendly Iraq, bordering on Iran, Saudi-controlled Arabia, Jordan and Syria, would provide a far better base for those operations than tiny, out-of-the-way Qatar. Contrary to General Scowcroft’s assertion, toppling Saddam Hussein would not “divert us for some indefinite period from our war on terrorism”. Rather, it is a logical step in carrying on that war effectively.
The general fears, however, that bringing about Saddam’s demise “undoubtedly would be very expensive--with serious consequences for the U.S. and global economy--and could as well be bloody”. In view of the outcome of the first Gulf War, “undoubtedly” seems rather strong. One must always beware of overconfidence, but the balance of forces has shifted strongly in the American direction since 1991. It should be noted that the previous war cost about $80 billion (in 2002 dollars), a figure that would, if repeated, be trivial in relation to the size of the U.S. or the world economy.
Accompanying the fear that Saddam will improve on his prior performance as a war leader is a phobia that war against Iraq “could well destabilize Arab regimes in the region, ironically facilitating one of Saddam's strategic objectives”. That is the same sort of concern that led General Scowcroft to oppose the breakup of the Soviet empire. It seems equally misplaced here. The worst case prospect is that the Arab masses will show their support for Saddam by rising against rulers who have not done enough to prevent his overthrow, leading to overtly Islamofascist regimes. That development would not be welcome, but it would be offset by the acquisition of a territorial base from which to pursue the war. Moreover, the probability of the worst case is low. Similar predictions for Pakistan haven't come true, nor should we assume that Arabs who overthrow one form of tyranny will instantly embrace another. There are some who desire a greater degree of personal and economic freedom, many who want to be on the winning side and may be able to figure out that a “hyperpower” is a sounder bet than Hamas.
General Scowcroft does sketch a strategy that will supposedly avoid bloodshed and instability: “the more progress we make in the war on terrorism, and the more we are seen to be committed to resolving the Israel-Palestinian issue, the greater will be the international support for going after Saddam”. He has, however, no concrete proposals for either making progress in the war or demonstrating greater “commit[ment] to resolving the Israel-Palestinian issue”. The commitment that the Arabs want from us is our complicity in forcing Israel to accept a hostile state on its borders. They have certainly shown no liking for President Bush’s commitment to a democratic Palestine cleansed of Jew hatred. Is General Scowcroft proposing that, in order to fight against terrorism, we align ourselves with the terrorists who make war on Israel? If not, he ought to tell us what marvelous scheme he has concocted to satisfy all sides of this long-intractable quarrel. Concentration on Palestine is far more of a diversion from fighting the terrorists than Iraq could ever be.
In sum, General Scowcroft’s views are not realpolitik but a muddled faux-politique that misreads every aspect of the present struggle. Iraq is not a bystander in the war on terrorism but a central participant - on the wrong side. The Arab states are not enthusiastic allies whose support will be shaken by the “diversion” of American power to a war against Iraq; they are grudgingly cooperative neutrals whose sympathy lies with our enemies. The likely outcome of regime change in Iraq will not be the destabilizing of friendly governments elsewhere but the acquisition of a base for pursuing the anti-terror campaign more effectively. Finally, adopting General Scowcroft’s alternative strategy of putting resolution of the Israeli-Palestinian conflict ahead of everything else will ensure, at best, a long, unproductive stalemate, at worst, a prestige-enhancing victory for terrorism.
August 11, 2002
No American politician is so foolish and suicidal these days as to present Saddam Hussein as a reasonable fellow with whom we can deal amicably. A few remain delusional enough to say hopeful things about, say, Yasser Arafat, but the Iraqi tyrant's popularity is fading even in Europe. A dove cannot, then, oppose invading Iraq on the grounds that the current regime is the innocent victim of slander by the Vast Right-Wing Conspiracy. Nor does there seem to be much expectation that Baghdad can be brought to to peaceable accommodation at the negotiating table.
The new dove line, as expounded on today's talk shows by Senators Levin and Boxer, is "containment". Senator Levin assures us that containment is "working". Senator Boxer seconds that and adds the phony tough-girl line that Saddam "needs to know . . . if he even thinks of using any weapons of mass destruction, he's history". How firm of her - but one needn't be a telepath to divine that Saddam has already entertained that thought. What the hawks want to do is deprive him of the ability to carry it into action.
I suppose that Saddam is being "contained" in the sense that he has not invaded the United States or any other country lately. All that he can do while "contained" is continue the development of nuclear, biological and chemical weapons, subsidize suicide bombers in Israel, and provide aid, comfort and cash to Islamofascism. As he does so, he can wait for economic sanctions to evaporate,as they surely will in time.
Meanwhile, we can be confident that the doves will not offer alternative proposals for continuing the war against terrorism. While leaving Iraq unmolested, they do not call for more vigorous pursuit of al-Qaeda or for squeezing the sponsors of Hamas and Hebollah or for issuing ultimatums to Saudi-controlled Arabia. So far as one can tell from their words, Mr. Levin and Mrs. Boxer and their friends prefer that 9/11 recede into the past, that Americans get over their hangups about having enemies, and that politics revert to "It's the economy, stupid".
Exactly the way to teach the next Osama bin Laden that being America's enemy is the softest game in town. You may not win right away, but you'll never lose. At worst, you might have to suffer being contained.
August 8, 2002
That Saudi-controlled Arabia is no friend of the United States is a staple of bloganalysis, and it is an easy proposition to defend. Especially when the Saudi foreign minister announces that his country will not permit its territory to be used for military action against Iraq; and Saudi money subsidizes anti-Western madrassas throughout the world; and Saudi media blare pro-terrorist propaganda; and so on. (For details, read any of the articles here.) I certainly won't dispute the catch phrase "Our enemy, the Saudis". Still, it is - pardon my French - simplistic.
What creates the complication is that we and the House of Saud have one large enemy in common: al-Qaeda. The (probably) late Osama bin Laden used to excoriate the "degenerate", "Godless" Saudi princes as vigorously as the decadent West and didn't hide his desire to replace them with a new regime, namely, his own. Unless one credits truly weird conspiracy theories, he was thoroughly sincere and the Saudi rulers truly hate and fear him and his followers.
It's commonplace to say the 15 of the 19 September 11th hijackers were "Saudis", but that is slightly inaccurate. They were domiciled in Saudi-governed territory, but it is a misnomer to identify the 23 million people who live there with the ruling family. There are only a few thousand Saudis, whose founding father 'Abd al-'Aziz ibn 'Abd ar-Rahman ibn Faysal ibn Turki ibn 'Abd Allah ibn Muhammad Al Sa'ud completed his conquest of the Arabian Peninsula not much more than 70 years ago. His descendants now form an oligarchy of a kind that would have been recognizable to Aristotle. In fact, pre-classical Corinth was ruled in much the same manner by the Bacchiadai, a royal clan who monopolized political office until they were overthrown (mid-7th Century B.C.) by the tyrant Kypselos.
Osama aspired to be the Saudis' Kypselos. Like his classical analogue, he was a rich man barred from the political sanctum, which he therefore sought to destroy. There must be many others like him.
In an age in which democracy is widely heralded as the sine qua non of legitimacy, preserving the dominion of perhaps 50,000 people (counting the Saudis, their women and their children) over 23 million is a perilous endeavor. The Saudis doubtless disagree among themselves how to carry it out. Some would probably be content to coopt opponents by broadening the political class to at least a limited extent, but the family leaders have quite clearly ruled that course out. Instead they pursue a number of strategies: intense surveillance and censorship at home, appeals to religious zealotry, magnification of external threats, appeasement of enemies and, as a last resort, reliance on foreign support. The Saudis cultivated British friendship, declared war on Nazi Germany (albeit near the very end of World War II) and backed the West during the Cold War - not because of any ideals shared with Western civilization but because they hoped to make themselves indispensable to the Great Powers most able to intervene in the Middle East. That strategy paid off in 1991, when the Gulf War was fought as much to protect Arabia as to liberate Kuwait (and the Saudis, let us remember, paid a large portion of the war's cost).
The Saudi oligarchy was also an initial beneficiary of the War on Terror. It was very pleased so long as the United States concentrated on decimating al-Qaeda. Unfortunately, from its point of view, President Bush did not have such a limited vision of the conflict. In three respects the war is now a threat to Saudi rule:
First, the booty from the American capture of Baghdad will include Saddam Hussein's archives, which are likely to reveal many embarrassing facts about the flow of Saudi money to our overt enemies. With the President having declared that those who are not with us are against us, the consequence could be an American-inspired "regime change" in Riyadh.
Second, once Saddam is gone, any successor government will be able to step up Iraqi oil production and will have to do so if it is to have any hope of repairing the country's disastrous economy. The result will be lower oil prices. The Saudis are already suffering from reduced income. A further drop would impair their ability to continue an effective policy of bribing Islamic malcontents.
Finally and most important, the Saudis have no easy way to avoid antagonizing both sides of the Islamo-Western conflict. Their expectation at first was that their subsidized mullahs would take a properly anti-al-Qaeda line and that America would be grateful for their sympathy. That phase lasted only until the war spilled over into Palestine. Antisemitism may not quite be the mullahs' supreme value, but it far outranks mere lucre, so the Saudis could not have prevented their clients from indulging in Jew hatred even if they had wanted to (as they probably did not). Nor could they halt the natural progression from reviling Israel to denouncing its ally the United States. Were the Saudis to stand against that tide, they would split their own ranks (since many among the ruling clique are staunch antisemites) and encourage hundreds or thousands of new bin Ladens to rise against them. At the same time, their residual ties to Washington make them objects of suspicion in Islamofascist eyes. Hence, neither America nor its enemies will be wholly pleased with an outcome to the war that leaves the House of Saud in power. If we crush the terrorists, an Arabian Kemal is one of the predictable sequels. Should we lose - more likely through lack of will than lack of means - one of Osama bin Laden's sons will sweep the oligarchy back into the desert.
What, then, are the Saudis to do? They can survive only so long as the war continues indecisively, keeping each side at bay by promising support and instilling fear of what would follow their overthrow. In pursuit of a deadlock, they labor to frustrate the invasion of Iraq and inflame Palestinian hatred of Israel. At the same time, they bar terrorists from their own territory and probably provide covert aid to our intelligence agencies. (That is the most reasonable interpretation of the Pentagon's kind words.)
The war cannot, however, last per omnia secula seculorum. Those Saudis with any foresight realize that they are doomed. Our best hope of turning their dilemma to our advantage is, I suspect, to identify our own Kemal within the Saudi family and make it possible for him to act while the fighting is still in progress. Indeed, a clever general may see the opportunity without our prompting.
If no Kemal exists or can be invented, what then? Daring schemes come to mind, such as secretly sponsoring an Islamic revolution in order to come to the assistance of less irrational Arabians against it, or fostering secessionism in the oil-rich Eastern Province (with which the House of Saud has no historical connection). It may prove necessary, though, to endure this obstacle to victory, work around it as best we can and wait until after the war is over to balance accounts. Saud delendum est, but maybe not today.
August 5, 2002
One of the most often quoted statements in one of the most famous opinions of one of history's most eminent judges is this from Learned Hand:
Any one may so arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the treasury; there is not even a patriotic duty to increase one's taxes. [Helvering v. Gregory, 69 F.2d 809, 810 (2d Cir., 1934)]
Later courts have quoted or paraphrased Judge Hand hundreds or thousands of times, and his words seemed till recently to be a truism of the tax law. Lately, however, a contrary sentiment has emerged, as liberal opinion makers line up to anathematize as quasi-traitors corporations that unpatriotically "arrange [their] affairs so that [their] taxes shall be as low as possible".
The supposedly treasonous technique has been dubbed with the odd name "corporate inversion". It occurs when a U.S. corporation with non-U.S. operations reincorporates in a low-tax jurisdiction like Bermuda. This restructuring does not reduce taxes on income earned in the United States, but, thanks to the way in which the U.S. taxes profits earned abroad, total post-"inversion" taxes on non-U.S. income may be significantly lower. Depending on how it sets up its factivities, a U.S. corporation's foreign earnings are either (i) taxed at the higher of the U.S. or the local corporate tax rate or (ii) taxed at the local rate, taxed again at the U.S. corporate rate when remitted to the U.S. and taxed a third time at individual rates when distributed to shareholders as dividends. Incorporation in Bermuda or a similar tax-friendly locale limits taxes to those imposed by the country from which profits are derived.
American taxation of foreign earnings is the most burdensome of any major nation. Higher taxes make a business carried on in Germany by a German (or British or Canadian or Japanese) company worth more than one that is identical but operated by a U.S. firm. In the long run, capital will flow toward more favorable investment opportunities, that is, away from U.S. enterprises attempting to make money outside our borders. Inversion is merely a tactic for stemming that unfortunate trend.
While inversions have been going on for years, they didn't attract much attention until the stock market turned downward during the final years of the Clinton Administration. A big drawback to reincorporation abroad is that shareholders must pay capital gains taxes at the time of the transaction. Low stock prices, while not exactly what CEO's yearn for, do minimize capital gains. That factor, plus an steadily more competitive world economy, spurred inversions. Then, in the aftermath of 9/11, pro-taxers had the inspiration of branding them "unpatriotic" - as if patriotism demands giving Irish and Spaniards and Koreans a competitive edge over American entrepreneurs!
As a truly remarkable gesture of patriotism, both houses of Congress have voted to deny federal contracts to "inverted" companies. That would mean that firms with no U.S. connections whatsoever would be favored over "inverters" that proposed to employ American workers in American facilities to do the same job!
If one is truly concerned about the relationship between taxation and patriotic fervor, the remedy is to reform the tax laws to alleviate the unfavorable treatment of foreign income. Bill Thomas, the chairman of the Ways and Means Committee, has in fact proposed that solution. To date, none of his Democratic colleagues has offered support, and no liberal commentator has endorsed his idea. Raging about corporate Benedict Arnolds is so satisfying, even if the effect is to prolong a tax regime that makes Americans poorer.