Wrote this a month or two ago, but still relevant. enjoy.
The events in Libya have made me wonder about the role of the U.S. government, not only domestically, but internationally as well. A lot of questions have arisen inside my mind regarding the behavior of the Government in certain situations, usually dire ones. For example, lets look at the whole financial crisis and the subsequent economic recession. Bear Sterns was allowed to crumble and fail (technically it was sold to JP Morgan for pennies on the dollar, same thing), while institutions like AIG were bailed out and carried to brighter days. Why? What was it about AIG that made it so important to save? Better yet, who determines who gets saved? Who picks the winners and losers?
In the case of Bear Sterns and AIG, it is possible to explore data and come up with an answer. Bear Sterns and Lehman Brothers were considered “not all that important” in the impending crisis. Sure they had plenty of toxic assets on their books, but not to the extent of AIG. AIG held thousands of contracts for credit default swaps for the toxic assets held by firms like Bear Sterns, as well as for entities across the globe. When AIG had to pay out on these contracts, they couldn’t come up with all the collateral needed and were forced to be bailed out or go under. The U.S. government sprang to the rescue fearing that if they did not act, the world economy would wither and die (whoops, looks like it did anyways).
Over two years, AIG received $150 billion in bailout loans to prop up financial institutions that held toxic assets like mortgage backed securities and other credit backed securities. These assets became near worthless at one point as the market panicked and speculators took hold. The institutions that held these assets were forced to write down their balance sheets, which made these institutions appear to be on the brink of insolvency, or at the very least these institutions would have been forced to tighten credit even more than they had to. Of course, a few months later, these assets had appreciated again after the market recovered a little, and the balance sheets of these banks were back to almost normal, yet credit has remained tight. These institutions have done so well recently, that over the last two years, the government has recovered a large portion of its loans, as well as made over $130 billion in profit. So, one has to ask themselves if these bailouts were indeed warranted and ended up saving the globe from a deep, deep depression, or if the Government decided to prop up institutions they favored while finding ways to eliminate those they deemed unnecessary. Again, who is picking the winners and losers, and why? In the case of AIG, Bear Sterns, Lehman Brothers and the rest involved in the Great Recession, only Hank Paulsen probably knows.
Now, lets move away from the financial fiasco, and focus on international relations and our role in the global community. Who is picking and choosing the winners here, and why? Libya is a prime example. For the last 30 years, the United States Government has been trying to oust Gaddafi. Reagan failed miserably, Bush Sr. and Clinton didnt really do much, Bush Jr. befriended the tyrant and tried to open up Libya, and now Obama seems to have picked up the torch from Reagan in attempting to end the reign of terror that has come with Gaddafis rule. Of course, the catalyst seems to have been Egypt and Tunisia, which then spred to Libya until Gaddafi decided to try to crush the opposition once again. This seems like a great time for President Obama to jump into the ring, throw a few punches, and then let the rebels finish Gaddafi off. Perhaps it is, but why have we chosen the rebels in Libya to win, and rebels in Bahrain for example to fail?
Almost everywhere you look in Africa, there is a dictator. EVERYWHERE! The same can be said for the Middle East. The U.S. has engaged only a small portion of these dictators, with success to varying degrees in places like Iraq. I will admit, it does seem like a good idea to get a crackpot like Gaddafi out of power, but there are plenty of nut bags in the area, so why have we decided to enter this battle? When Mubarak was tear gassing and kidnapping his opposition, we did nothing. In fact, it was the U.S. who had sold him most of the armament used against the rebels! Now look at Saudi Arabia who has a monarchy that has been brutal to its own people at times, but has been outright evil in Bahrain recently. The Kingdom sent troops to help quell the rebellion and assist in the massacre of Bahrainians (I think that’s what they are called). Where is the call for the Saudi King to go? Where is the statement saying the Bahraini government has lost its legitimacy? Why are we picking and choosing which Arab countries to intervene in?
The answer to this is a lot more complex, and more speculative, than it is for the financial mess. My guess is that we chose to intervene in Libya for 3 reasons. Number one is the fact that the U.S. supports democracy worldwide, and Gaddafi has been a thorn in the paw of the U.S. government for some time. Gaddafi also has no qualms about attacking foreigners abroad, which was displayed by the Pan Am bombing. So, in essence Gaddafi poses a threat to democracy in the region, as well as American citizens. Number two is the also one of the reasons we invaded Iraq, OIL. Libya has the second largest reserves in Africa and its oil equipment is outdated. Gee, what an opportunity for the U.S. oil companies! Not only would this open up areas for drilling and bring a new supply to market, but it would also mean retrofitting of all the ancient oil rigs currently in Libya. Sounds like a win win for Haliburton and Exxon Mobil. The oil excuse also sheds light on a possible reason why we refuse to engage Saudi Arabia. Obviously you don’t want to piss off one of your strongest allies and second largest oil supplier. My third reason is a little more dubious, but I believe logical. Egypt by no means is stable yet, and the future is yet to be determined. There is always the chance Egypt slips back under the rule of another tyrant, or worse yet it could turn into a narco-terrorist state. This could end up meaning that Egypt may attempt to engage in conflict with Israel on behalf of Palestine. So it would be very strategic if the U.S. helped topple Libya, and then aided in propping up a new regime guided by our government. Should Egypt deviate from its transition to democracy or attempt to intimidate Israel, the U.S. military would literally be a stones throw away. Now I know that may be a little conspiratorial, but also a bit logical don’t you think?
In the end, it remains to be seen whether or not the President has made the right choice by aiding the rebels in Libya. He has not ruled out the possibility of arming these people either, so that makes the crystal ball even more cloudy. I suppose we will have to wait patiently with fingers crossed to find out. As I stated before, for this to truly work all across the middle east, the movement has to be home grown and organic, not drummed up by our Government. If we choose to help Libyan rebels, and not Bahraini rebels, I think it sends the wrong message. Sure, America is against tyranny and for democracy, but only when it benefits us. Huh…THAT seems un-American to me, how about you?