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March 30, 2009

Barack Obama damages his G20 chances

Filed under: banking, business, economics, financial advice, investment, markets, politics — Alan Thornhill @ 3:17 am

Barack Obama’s decision to expand the US military commitment to Afghanistan can only damage the chances of a successful outcome from the G20 meeting in London this week.

And that would be a tragedy.

The US, along with its allies including Australia,  has been fighting terrorists  in that country for more than seven years,  since the invasion in 2001.  But there has been little clear progress, to show for it.

Wars are expensive, both financially and in terms of political capital.

As a new, fresh US President, just two months into office,  Obama would, usually,  have  have carried great prestige and power into this week’s meeting.  Especially as his election raised hopes  throughout the world.

The late Kim Beazley senior once put the dilemma Obama now faces, very sharply, saying that getting involved in a land war in Asia is the “second worst military decision it is possible to make.”

“After invading Russia in winter.”

Beazley Snr., was criticising the US in Vietnam, at that time.  But his words still have power, today.

The Taliban’s decision to protect Osama Bin Laden, which led to the US invansion, was certainly stupid.

The US had been attacked by al Queada – and certainly had a right to retaliate.

But fighting unwinnable wars, as the US now arguably is, in both Iraq and Afghanistan, is not a clever response.

Nor is sending in an additional 21,ooo troops, when a war bogs down, as Obama is now doing in Afghanisatan.

Both wars are being fought on the US national credit card.

And that is already heavily loaded.

President Obama is taking a clear, financial strategy to the G20 meeting in London.

He wants other nations to follow the US and Australian examples, and stimulate their economies  to lift not just themselves, but the entire world, out of  recession.

But the clear fact that the present recession  started  with the excesses of  US financiers, is enough,  by itself, to make Obama’s position at the G20 summit difficult.

His decision to commit more US troops to Afghanistan will, inevitably, add to those difficulties.

Especially as several European leaders leaders, including Germany’s Angela Merkel, are already deeply suspicious of  both stimulus packages  and long pointless wars, anyway.

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