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Current Events, Recent Posts

Train Wreck in Slow Motion.

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I know some of you are probably tired of my posting these sort of comments as they are somewhat hard to understand and follow without some education in that confusing world of Economics; however, I love it. Read carefully and try to get a grasp of what he is saying and showing you in the charts. Chart #7 is an eye opener of me. As he says, we are about to watch a train wreck in slow motion. I agree with his advice, keeping that money in your bank or under your mattress is not the way to get through this perfect storm we are about to experience. Hard assets will always win out.

Good luck Brothers and Sisters.

Calafia Beach Pundit
Monetary policy is a slow-motion train wreck

Posted: 13 Oct 2021 06:32 PM PDT

There is no shortage of things to worry about. 

That’s a phrase I have used several times over the past decade. I used it as a foil to argue that since the market was quite cautious (and nervous), then a surprise downturn or selloff wasn’t a serious risk. Recessions usually happen when nearly everyone is feeling optimistic. Today there again is no shortage of things to worry about, and the market is within inches of its all-time high. Most disturbing, however, is that neither the Fed nor the administration nor Congress nor the bond market are very worried about inflation. Inflation and all its nasty consequences are, arguably, big things to worry about today.

Fed policy, as laid out in today’s FOMC minutes, is amazingly blasé about the risks of higher inflation. The Fed currently plans to begin “tapering” its purchases of Treasuries and mortgages sometime next month, and to finish tapering by mid-2022. That’s not a tightening of monetary policy; it’s only making policy less accommodative over a prolonged period. Actual tightening—which would consist of draining reserves (i.e., selling bonds) and/or raising the interest rate it pays on reserves (i.e., higher short-term interest rates)—won’t begin until sometime late next year.

The market has apparently agreed that this is a sensible course of action. Inflation expectations embedded in bond prices are somewhat high, but still a relatively tame 2.75% per year (average) over the next 5 years. The bond market is currently pricing in one or two 25 bps “tightenings” by the end of next year (i.e., short-term interest rates of roughly 0.4% to 0.5%), and a 1.5% fed funds rate 3 years from now. By any standard, that would be a supremely gradual pace of monetary tightening. But at a time when inflation is at levels not seen in over 30 years?

This is almost certainly an unsustainable situation. The Fed and the bond market are almost certainly underestimating the risks of higher-than-expected inflation.

How do I know this? It’s all about incentives. Today, the incentives to borrow are huge. Short-term interest rates are below the current level of inflation and will likely remain so for at least the next year. (Even 30-yr fixed rate mortgages are lower than the rate of inflation.) Smart investors and consumers won’t find it hard to arbitrage these variables. In fact, the process is already underway. You simply borrow money and buy anything that is a productive asset and which also has roots in the nominal economy (e.g., commodities, equities, farms, factories, cars). Leverage is your friend and ally in a high-inflation, low-interest-rate world.

How does one place a bet on an asset (in this case the dollar) that is expected to decline in value (because of inflation eroding its purchasing power)? You sell it if you own it, or you sell it short (you borrow it and then sell it). You buy it back when inflation settles back down and/or interest rates rise to a level that is greater than inflation. One way to “short” the dollar is to simply borrow dollars. And a common way to do that is to get a loan from a bank. And when the bank lends you money, the bank can actually create the money it lends you, which in turn expands the money supply. Banks are uniquely able to create money, provided they have sufficient reserves on hand to collateralize their deposits. Since the banking system currently has upwards of $3 trillion in “excess” reserves, thanks to the Fed’s gargantuan purchases of notes and bonds, banks have an almost unlimited ability to increase their lending.

So it’s not surprising that the M2 money supply has expanded at an unprecedented rate over the past 18 months, a time in which the Fed has bought almost $3 trillion of notes and bonds and bank deposits have swelled by some $5 trillion. And it’s also not surprising that in the past six months consumer price inflation has posted a 6-7% annualized rate of growth—a rate last seen in late 1990.

As for Biden, his approval rating is now down to an abysmal 38%. His administration has committed a series of blunders, most notably with the Afghanistan withdrawal. His top priority now is to pass two bills chock full of new social spending and new taxes which he preposterously claims will cost the economy “zero.” Meanwhile, inflation has risen to multi-decade highs, yet both the administration and the Fed keep insisting it’s just transitory. Things will almost certainly get worse if trillions of new taxes and spending, additional layers of bureaucracy, and hundreds of billions of dollars of new handouts and subsidies get lavished on the middle class. My good friend and talented artist Nuni Cademartori sums it up in this cartoon:

As the battle in Congress over Biden’s “Build Back Better” agenda rages, I would urge everyone who thinks this agenda will actually help the economy grow and prosper to read the recently released study by the Texas Public Policy Foundation in collaboration with my good friend, Steve Moore of the Committee to Unleash Prosperity.

The key findings:

• The cost of the Biden Build Back Better plan spread across two bills will reach $6.2 trillion over the next decade.

• The higher tax rates on corporate income, small business income, capital gains, and so on will raise the cost of capital and reduce national investment and the capital stock.

• Compared to baseline growth, the negative impact of these taxes over the next decade will result in 5.3 million fewer jobs, $3.7 trillion less in GDP, $1.2 trillion less in income, and $4.5 trillion in new debt.

While I’m on the subject of Steve Moore, whom I’ve known since the mid-1980s, I will once again recommend you read and subscribe to the Committee to Unleash Prosperity’s free daily newsletter. I read it every day, as do more than 100,000 citizens and Washington policymakers. (One of his recent issues featured Nuni’s cartoon, and another featured some of my recent charts.)

In the study mentioned above you will find details on a plethora of Biden’s tax proposals (e.g., a 12.5% payroll tax on all income over $400K, a reduction in the estate tax exemption of $8 million, and an increase in the top marginal tax rate to 65%) and their likely negative impact on the economy and employment. It’s frightening to think that the people who came up with these proposals apparently believe that the overall impact of BBB will be stimulative. Have they no common sense? Here’s a fundamental supply-side truth: when you tax productive activity and success more, you will get less of it. And when the government borrows trillions only to redistribute the money to favored groups and industries, you get a weaker, less efficient economy. And you also risk boosting already-high inflation.

I’ll wrap things up with some updated charts and commentary:

Chart #1

Nothing illustrates better the supply-chain bottlenecks that currently plague the global economy than Chart #1. Used car prices have literally skyrocketed; in inflation-adjusted terms, used car prices are higher than they have ever been. In nominal terms they are up over 50% since March ’20.

Chart #2

Chart #2 shows how almost half of small businesses in the US report paying higher prices. The last time this occurred was in the 1970s. It’s hard to escape a higher inflation Deja vu conclusion.

Chart #3

 

As Chart #3 shows, bank reserves are very near their all-time high. The vast majority of these reserves are “excess” reserves, meaning they are not required to collateralize bank deposits. Banks thus have enough reserves on hand to collateralize an ungodly increase in deposits via new lending (i.e, money creation). If the Fed doesn’t increase the interest rate it pays on these reserves by enough to make them more attractive, on a risk-adjusted basis, than the interest rate banks can expect to earn on new lending, bank lending will surely continue to expand, and that will fuel a prolonged expansion of the money supply and ever-higher inflation.

Chart #4

 

Chart #4 shows the 6-mo. annualized rate of growth of the CPI (including the ex-energy version). I think this is a fair way to measure what’s happening now, since we are well past all the distortions of last year and the turmoil earlier this year. Inflation by this measure hasn’t been this high since late 1990.

Chart #5

Chart #5 compares the year over year growth in the CPI (I’m being conservative with this) to the level of 5-yr Treasury yields. Yields haven’t been this low relative to inflation since the 1970s. Recall what happened back then: millions of households made a fortune borrowing money at fixed rates and buying houses. Negative real interest rates cannot be sustained for long, mainly because of the incentives they create to borrow and buy.

Chart #6

Chart #6 is an updated version of the one featured in Steve Moore’s newsletter. It’s important to note that the multi-decade trend rate of M2 growth is 6-7% per year. This has been blown away in the past 18 months. If the public tires of holding $3.8 trillion more in bank deposits than they normally would at this time, that’s a tsunami of money that could float higher prices for nearly everything in the next year or so. It’s also worth noting that M2 has been growing at a 10-11% annualized rate so far this year.

What worries me the most right now is how this all sorts out. The Fed seems determined to avoid even the semblance of tightening for the next 12 months. Yet if inflation turns out to not be transitory as they currently expect, how long will it be before policy becomes tight enough to threaten the economy’s health?

Chart #7 

Chart #7 provides some historical context which may help answer that question. Note that every recession on this chart (shaded bars), with the exception of the last, was preceded by 1) a flat or negatively-sloped Treasury yield curve, and 2) a very high real Fed funds rate. Both of those conditions confirm the existence of very tight monetary policy that was intended to keep inflation pressures at bay. Neither condition is in place today, however, which strongly suggests that monetary policy poses no threat to the economy at this time.

Past Fed tightenings, however, were different from what a tightening would look like today. To really tighten policy, the Fed would have to 1) start raising the interest rate it pays on reserves, and 2) start draining reserves by selling bonds. It might take years to get rid of all the excess reserves, however, and no one knows for sure how the economy will respond to higher short-term rates in the presence of abundant reserves—that’s never happened before. In the past, the Fed simply drained reserves until they were in such short supply that the banks were willing to pay ever-higher interest rates in order to acquire enough of them to collateralize their deposits. A scarcity of reserves led to a liquidity shortage, and high real borrowing costs led to bankruptcies and weak investment. Eventually, economic growth ceased, and the inflation cycle was broken.

The dilemma for investors: we might be years away from a return to these conditions, so selling risky assets right now might be premature. And, by the way, holding cash is a guaranteed way to lose money. But how long can you wait, knowing that another economic collapse looms on the horizon?

In the meantime, the prospects for Biden’s Build Back Better lollapaloosa are declining by the day, thankfully, and the spreading disarray in Washington only makes that more likely. I’m willing to bet that if any of his bills survive, it will be in greatly reduced form, and thus much less damaging to the economy. Just letting the economy sort things out on its own would be a great relief to everyone, in my view.

Nobody said investing was easy. There are a lot of things to worry about these days. But I wouldn’t panic just yet. The next year or so might be likened to watching a train wreck in slow motion.

Rik is a great friend and brother Marine with whom I served several times. Thanks Rik, I love this stuff. Give him a call .


 

 

Originally posted 2021-10-17 16:27:42.

Recent Posts

Parents Beware!

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From one of the few newspapers that tell it like it is — the Wall Street Journal. Make no mistake about it parents and grandparents, your children are at risk

Merrick Garland Has a List, and You’re Probably on It

By Gerard Baker

Merrick Garland’s got a little list.

The attorney general is compiling a steadily lengthening register of “society offenders who might well be underground and who never would be missed,” as Ko-Ko, the hypervigilant lord high executioner, sings in Gilbert and Sullivan’s “The Mikado.”

Mr. Garland’s list of society offenders is compendious. At the top are right-wing extremists who’ve been officially designated the greatest domestic threat to U.S. security, but whose ranks seem, in the eyes of the nation’s top lawyer, to include some less obviously malevolent characters, including perhaps anyone who protested the results of the 2020 election. Then there are police departments not compliant with Biden administration law-enforcement dicta, Republican-run states seeking to regularize their voting laws after last year’s pandemic-palooza of an electoral process, and state legislatures that pass strict pro-life legislation.

They’d none of them be missed.

Oddly, the list doesn’t seem to extend to the hundreds of thousands of people who have crossed the southern border so far this year and are now presumably at large somewhere in the U.S. without a legal right to be in the country. Nor to those benevolent folk who have reduced several of the nation’s urban centers to crime-infested wastelands.

Which is presumably why the latest names on his roll are those parents who have had the temerity to challenge local school boards about the mandates they are imposing on their pandemic-ready classes and what the children are learning.

That wasn’t how the attorney general presented it when he announced the news. Citing a “disturbing trend” in harassment, intimidation and threats of violence against school-board members, teachers and other school employees, he declared that he was directing the Federal Bureau of Investigation to work with local and state law enforcement to develop “strategies” for dealing with the problem.

The announcement looked as though it had been carefully coordinated with the National School Boards Association (NSBA), which had asked the Biden administration to do exactly this.

Decent people everywhere acknowledge that violence is intolerable—whether perpetrated by Black Lives Matter agitators torching buildings, Trump supporters smashing federal property, or parents who throw projectiles at school board members.

But the letter from the NSBA contained barely any evidence of actual violence. It cited mostly antisocial behavior and threats, and some of the offenses referenced—such as a parent making a mock Nazi salute to a school board—are, however offensive, constitutionally protected speech.

And, as has been widely noted, when acts of violence occur, they can and have been dealt with by local or state law enforcement. There is no federal interest in any of these infractions.

All this merely underscores what the real objective of the attorney general’s action was—and we don’t need to engage in speculation because it was recently spelled out to us by another leading member of President Biden’s party, Terry McAuliffe, the Democratic candidate for governor of Virginia.

In a rare moment of honesty from a politician, Mr. McAuliffe made clear, in a television debate with Republican Glenn Youngkin, the Democrats’ conception of the role that parents should have in their children’s education: none whatever.

“I don’t think parents should be telling schools what they should teach.”

Aside from the jaw-dropping disdain for families, Mr. McAuliffe’s prescription is at odds with Article 26.3 of the United Nations’ Universal Declaration of Human Rights, the sort of grand multilateral pronouncement the Democrats usually fetishize, which states: “Parents have a prior right to choose the kind of education that shall be given to their children.”

This flagrant attempt to intimidate parents into handing their children over to the mercies of the state is as sinister as anything the modern progressives who now control the Democratic Party have done.

The message is clear, and it has been the character of education in totalitarianism systems through history: These are not your children; they are wards of the state, and the state (in this case through the teachers unions that fund the Democratic Party) will determine what they learn and how.

Democrats like Mr. McAuliffe insist that pernicious racial doctrines teaching the ubiquity of white supremacism and the inherent racism of American society and encourage racial segregation aren’t actually taught in schools. But this is laughable. The same Democrats have spent the last year insisting on racial “equity” as the defining objective of their social program. Why would they leave it out of the schools they mostly control?

Mr. Garland’s brazen attempt to intimidate will likely backfire as more parents—including many who aren’t especially conservative—become alarmed by what they see and hear in their children’s schools. By placing them on his little list, he may have done us all a favor.

Originally posted 2021-10-12 15:01:23.

Current Events, Recent Posts

Rac-nophobia —

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— six boats, thirteen Marines, and an attitude

Returned last night from the only Marine reunion I attend — the RACPAC. If you know not of whom I speak, shame on you as you’ve not read “The Book.” If you have but don’t remember, go to chapter 46 and refresh. This one was special as Lt Tim Armstrong USMC was there for the first time, but he is now Col, USMC (Ret). What a joy it was to see Tim again. Anyway, it was, as always, a grand time to see these Marines again; it’s always great joy to see how every one of them turned out, not a dammed liberal among them!!! All very successful in their afterlife, especially the young enlisted  Marines who were not careerists, but chose to take their hard learned knowledge to the civilian world and succeed!

I’ve often asked myself over the years since retirement, especially every September as I fly to Virginia Beach, what did I do to deserve to serve alongside such giants of our Corps. As my coxswain and I were cruising down the Appomattox  River one sunny afternoon, he asked, “Popeye, can you believe the Marine Corps is actually paying us to do this ?” Of course, my reply was, “No Crazy I can’t, but they sure are!”  Having said that, do not dismay as this was a grueling and very demanding eighteen months with no guidance from MCDEC or HQMC, often working under arduous weather conditions and usually six and sometimes seven days a week. And here they are in all their glory.                     Lord, what memories!!

 

 

 

 

 

Now to the sad state of affairs of our once great nation. Another good one from my friend Greg; thanks Greg, I love your missives, and so do my followers.

By: G. Maresca

Hooking off the jab

In the sweet science, a skilled pugilist will be able to hook off their jab. The same holds for COVID era politicians and their obsession with vaccine mandates and boosters.

President Biden leads the mandate vaccine charge yet allows tens of thousands to pass through the southern border daily who have not been tested let alone vaccinated.

Initially, “if vaccinated, you are not going to get COVID,” has devolved to “people who got vaccinated remain at risk.” Infections are increasing among the vaccinated as a plethora of evidence highlights how the vaccine’s efficacy is waning.

For those who were vaccinated but plan to refuse the booster shot will find themselves back at square one because COVID is here to stay, just like any other influenza virus.

Quite the bioweapon China unleashed.

Democrats politicized COVID by refusing to acknowledge that China covered up and lied about the virus. They then used the pandemic as an excuse to lockdown the country and change election rules.

A study from the University of California San Diego highlighted how the vaccine’s effectiveness dropped from 94% in June to 65% in July with a 19-fold increase of those already vaccinated. Israeli data said Pfizer’s vaccine went from a 95% effectiveness to 39% by July. Apparently, Delta is more contagious but less lethal, according to English data and runs at 0.2% ⸻ the same as the seasonal flu. The CDC said those vaccinated who contract COVID have as high a viral load in their nasal passages as those who are unvaccinated.

It is not the unvaccinated that are driving COVID’s mutations.

In February even NPR reported, “vaccines can contribute to virus mutations.”

National Institutes of Health chief Francis Collins’s blog ridiculed a study his agency financed that said by December 2020, at least 100 million Americans were infected – five times the official count.

The pro-vaccine army that permeates government, the pharmaceutical industry and the mainstream media have cross-pollinated into a universal censorship android that prevents any information that conflicts with their narrative and balance sheets. They conveniently ignore the adverse health conditions and deaths resulting from the jab.

Texas is being sued by the Biden administration to protect a woman’s right of choice to an abortion. Yet, when it comes to a woman’s right to choose to vaccinate – forget it. It is only a choice when it can stop a baby’s beating heart.

Cells from an aborted fetus were used to test and produce the vaccine. Biden’s support of abortion only manifests itself in his vaccine mandate.

If this is about saving lives, access to every resource should be a given. The leftist media ignores or simply denies that Hydroxychloroquine has any efficacy in treating COVID when it has. Moreover, natural antibodies are a nonfactor even though studies say they provide greater immunity, both in breadth and duration. For those with immunity, vaccination is unnecessary and potentially grievous. However, there is no money or control in natural immunity underscoring how this is not about health care.

COVID conveniently removes the spotlight from the Afghanistan debacle, while Democrats would love to extend COVID through an unverifiable 2022 midterm mail-in ballot election. Initially, boosters were needed after eight months, then five, and arguably now for just susceptible groups like the elderly. With so many different versions and timelines, it is no wonder what the government and politicians say has no meaning.

Just months ago, Biden said he “would not demand that it be mandatory.” However, in Biden’s recent COVID vaccine mandate address, he flipped-flopped declaring: “We’ve been patient, but our patience is wearing thin.”

Since Biden is so impatient, perhaps he should resign.

Patience with Biden’s poor decisions from Afghanistan to the southern border is what is truly “wearing thin.” Apparently, unable to help himself or the nation, Biden compounded the issue by rejecting the Constitution he swore to uphold saying, “This is not about freedom or personal choice.”

Mandates are not only unconstitutional but polarizing and inherently un-American.

Mandates underscore how the left’s default position is always force.

What happened to unifying the country? Biden would rather lay blame while mandating vaccine compliance or lose your livelihood.

If it is your prerogative to jab your way into oblivion, knock yourself out.

Originally posted 2021-10-05 16:02:26.

Current Events, Recent Posts

China VS U.S.

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Received the following from a highly resected Brother Marine referred to as “Mustang,” which many of you know what that moniker means. Anyway, I don’t watch TV except Netflix and Amazon Prime. Would enjoyed watching this episode however. Enjoy and thank you Mustang, it is definitely blog worthy! Really there isn’t much to enjoy as it is all so true and scary as hell.

 

“Real-Time” host Bill Maher closed his show Friday night by sounding the alarm on China’s growing dominance over the United States. Why are Americans sleeping?

 

We aren’t sleeping, we are spending our time teaching and assisting little boys how to become little girls! And, if we aren’t busy doing that we have the Sec of Defense, responding to an order from the ‘commander’ in chief, designing stylish new uniforms for pregnant ‘soldiers’.

 

“You’re not going to win the battle for the 21st century if you are such silly people. And Americans are all silly people,” Maher began the monologue, alluding to a “Lawrence of Arabia” quote.

 

Do you know who doesn’t care that there’s a stereotype of a Chinese man in a Dr. Seuss book? China,” he said. “All 1.4 billion of them couldn’t give a crouching tiger flying f— because they’re not silly people. If anything, they are as serious as a prison fight.”

 

Maher acknowledged that China does “bad stuff” from the concentration camps of Uyghur Muslims to its treatment of Hong Kong. But he stressed, “There’s got to be something between an authoritarian government that tells everyone what to do and a representative government that can’t do anything at all.”

 

“In two generations, China has built 500 entire cities from scratch, moved the majority of their huge population from poverty to the middle class, and mostly cornered the market in 5G and pharmaceuticals. Oh, and they bought Africa,” Maher said, pointing to China’s global Silk Road infrastructure initiative.

 

He continued: “In China alone, they have 40,000 kilometers of high-speed rail. America has none. We’ve been having Infrastructure Week every week since 2009 but we never do anything. Half the country is having a never-ending woke competition deciding whether Mr. Potato Head has a dick and the other half believes we have to stop the lizard people because they’re eating babies. We are such silly people.

 

“Nothing ever moves in this impacted colon of a country. We see a problem and we ignore it, lie about it, fight about it with each other, endlessly litigate it, sunset clause it, kick it down the road, and then write a bill where a half-assed solution doesn’t kick in for 10 years,” Maher explained. Then the half-assed bill is forgotten.

 

“China sees a problem and they fix it. They build a dam. We debate what to rename it.”

 

The HBO star cited how it took “ten years” for a bus line in San Francisco to pass its environmental review and how it took “16 years” to build the Big Dig tunnel in Boston, comparing that to a 57-story skyscraper that China constructed in only “19 days” and Beijing’s Sanyuan Bridge, which was demolished and rebuilt in “43 hours.”

 

“We binge-watch, they binge-build. When COVID hit Wuhan, the city built a quarantine center with 4,000 rooms in 10 days and they barely had to use it because they quickly arrested the rest of the disease,” Maher said. “They were back to throwing raves in swimming pools while we were stuck at home surfing the dark web for black market Charmin. We’re not losing to China, we LOST. The returns just haven’t all come in yet. They’ve made robots that check a kid’s temperature and got their asses back in school. Most of our kids are still pretending to take Zoom classes while they watch TikTok and their brain cells fully commit ritual suicide.” Our teachers unions are finding every single way to keep themselves on the payroll, but keep students out of the classrooms. WAKE UP AMERICA! That means ALL of YOU.

 

Maher then blasted New York City Mayor Bill de Blasio, accusing him of degrading school standards by eliminating merit and substituting a lottery system for admittance to schools for advanced learners. Our country is going down the toilet.

 

“Do you think China’s doing that, letting political correctness get in the way of nurturing their best and brightest?” Maher continued. “Do you think Chinese colleges and universities are offering courses in ‘The Philosophy of Star Trek, ‘The Sociology of Seinfeld,’ and ‘Surviving the Coming Zombie Apocalypse’? Can this be real? Well, let me tell you, China is real. And they are eating our lunch. And believe me, in an hour, they’ll be hungry again.”

 

A somber message, isn’t it? But, where is Maher wrong? I guess the good news is that unlike the Chinese our young people have free text messaging and iPhone games.

Originally posted 2021-09-29 15:16:37.

Current Events, Recent Posts

A Little History

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Failure in Afghanistan Has Roots in the All-Volunteer Military

For the past three decades, careerism among senior officers coupled with the disconnect between the American public and the All-Volunteer Force have led to failed and unnecessary overseas military interventions.
By Paul Cavallo

September 2021
Proceedings
Vol. 147/9/1423

The tragedy that unfolded over the past several weeks in Afghanistan began with the creation of the “all-volunteer” military in 1973 and the self-promoting careerism that has stalked the Pentagon ever since. Too few leaders have been willing to speak truth to power and say no to overseas military adventurism that had little bearing on the safety and security of this nation. And it goes without saying that those in charge when the war begins are never those who have to finish it.

We saw this most clearly when, in 1990-91, America sent its young warriors into the deserts of the Middle East. We called it “The Gulf War” and “Desert Storm,” but it was, in reality, America’s first mercenary war. The Bush administration cut a deal with the Saudis and Kuwaitis: our men, their money. Kuwaiti “princes” lived large in hotels from Saudi Arabia to Paris while our young soldiers and Marines dug fighting holes in the desert under a searing sun.

U.S. Marines in Desert Storm
U.S. Marines in Operation Desert Storm in 1991. (Naval Institute archives)
The peacetime, all-volunteer military, after all, was a good job with benefits and perks. And that “war” went relatively well and quickly with few American servicemembers killed or injured, to the high praise of the U.S. public who were entranced, awed, and seduced by the lethality, performance, and accuracy of our high-tech weapons, while forgetting that the troops on the ground, in the desert, held it all together and made the irrefutable success of the war possible. Yet it was also the start of the forever wars. Saddam Hussein remained in power after the war and the U.S. military remained in the Middle East—enforcing no-fly zones and oil embargoes on Iraq with naval forces in the Persian Gulf and air and land forces based in Kuwait, Bahrain, and Saudi Arabia.

While it might be a “chicken or the egg” argument, it is hard not to see that the permanent increase of U.S. military presence in the Middle East went hand in hand with the rise of militant Islam and anti-American terrorism. How many Americans remember the 1996 terrorist bombing of a U.S. Air Force barracks in Khobar, Saudi Arabia? Nineteen U.S. servicemembers were killed and 498 wounded. Two years later, the embassy bombings in Tanzania and Kenya killed 12 Americans and hundreds of civilians and wounded 4,500 people. Then came the October 2000 attack on the USS Cole (DDG-67) in Aden, Yemen, killing 17 sailors and injuring dozens of others. Less than a year later came the 9/11 attacks, answered shortly by the U.S. invasion of Afghanistan. A little over a year later, under the false pretense that non-existent Iraqi weapons of mass destruction would be used against the United States, came the invasion of Iraq.

Khobar Towers bombing in 1996 in Saudi Arabia
The 1996 Khobar Towers bombing in Saudi Arabia killed 19 U.S. servicemembers and injured nearly 500 more. 

By the end of 2003, U.S. special operations forces had completed much of their mission in Afghanistan to capture or kill senior leaders and high-value targets within both al-Qaeda and the Taliban. The Pentagon, however, rather than putting their “swords” away somehow decided to “nation build” a medieval land of warring tribes into a Western-style democracy, ignoring the fact that our democracy took centuries and many great wars to achieve.

For the past 31 years, the brunt of the cost has been borne by the all-volunteer force. The majority of American citizens have not served (none were required to), and most know few who have. A few dozen—or even a few hundred—servicemembers killed per year was the cost of doing business. But where were the generals and admirals who should have stood up to the civilian leaders, without compromise, to say “enough,”—that foreign wars too often leave our soldiers, sailors, airmen and Marines dead and forgotten, and for what? Were the military’s senior leaders just following along in-line, waiting for their moment, their chance for another star, or a richly coveted post-retirement job with a “vendor.” Were they just inured to the burdens of the profession? Unable to see the giant machine in which they were cogs—the failed foreign policy that resulted in the spilling of blood and national treasure for questionable (if any) gain.

It is no surprise that the “war” in Afghanistan eventually became a bottomless money pit. More than a trillion dollars was spent; did it make our nation safer, or did it just make Washington-connected corporations rich? Some of that money was funneled back to Congress through campaign donations and favors, all the while young Americans were being killed and wounded. Walk into any Veterans Administration hospital and see first-hand the reality that was brought home.

So, with the most recent deaths and injuries at Kabul International airport—clearly caused by a lack of planning, foresight, and courage at the top—we witness more evidence of the ongoing tragedy and travesty that is American “foreign policy” and the willingness of senior military leaders to go along with it. Will we ever learn? History suggests, no.

Postscript: While some commenters on the  actual article disagree with the author, I do not. I understand where he is coming from and follow his line of thought completely. The disconnect between the American public in general and the military and their assigned missions is indeed relevant. A quick “war story” if I may.

Serving as a temporary Chief of Staff at a command when the actual made a quick decision to retire, I had to handle my job as well for a few months while the Corps had to find a colonel for the billet. After a few months of this double duty my general, a fresh-caught BG, comes in my office with a cup of coffee to shoot the bull. Out of the blue he calmly says, Jim you know you will never make general.” To which I laughed telling him all I ever wanted to be was a Gunny. He asked if I wanted to know why, and of course I knew he wanted to tell me so I said yes.

He told me he knew several generals who would jump at having me as their COS because I had a knack of letting seniors (and juniors) know that if they cannot handle your answer they should never ask me the question. He said generals cannot do that. They must always speak the party line or they will never move above one star, which is why so many generals retire as a BG. They spoke outside the party line once and were passed over, or they  want nothing to do with it and retire.

Personally, I took his comments as compliment as that philosophy helped me to rise from private to colonel, and I was not about to change it. When a general speaks, understand he is never telling you what he truly believes in his heart. He is simply a mouth piece for the admisntration at the time.

Originally posted 2021-09-07 10:06:43.