Obama's Afghan Speech, a Notable Anniversary, and What War Does to the Dollar

December 1, 2009

From leaked reports, we know that President Obama will explain in prime time tonight why a 30K troop buildup is necessary to West Point cadets, the American public and the wider world community.  He will lay out quantitative reality checks that will determine America’s future commitment in Afghanistan to ensure that the war doesn’t degenerate into bottomless pit without victory or progress toward an exit.  The president had to choose from a set of unattractive strategies.  Naturally, the press is full of comparisons to America’s experience in Vietnam and the more recent Soviet failure in Afghanistan.  However, none of the articles that I’ve read mentions an ominous anniversary today.  The connection is with how troops were secured for the Vietnam War.

The first and most important draft lottery for all eligible men ages 19 to 26 was held exactly forty years ago on December 1, 1969.  Conscription gave strong impetus to the passion and rapid spread of the anti-war movement in the 1960s.  The thinking behind a lottery to determine whom to draft was that the process would appear less arbitrary and that uncertainty would be lessened for draftees and those with high lottery numbers alike.  People would know where they stood.  In an important respect, the draft lottery on December 1, 1969 was the first step toward transitioning to an all-volunteer army, and that shift is an important reason why opposition to the wars in Iraq and Afghanistan have not matched the maelstrom of the anti-Vietnam war movement.  The slice of Americana that is directly at risk remains below critical mass.  Containing protest is critical to any war strategy.

The dollar didn’t perform well during the Vietnam War, and it has done even worse since the 9-11 attacks.  From its level in 1965 when troop escalation mushroomed to April 29, 1975 when Saigon fell to the North Vietnamese, the dollar dropped 40.1% against the mark and 18.3% against the yen.  Compared to levels on the morning of September 11, 2001, the dollar is 40.6% weaker against the euro and down 28.9% against the yen.  War creates political uncertainty and magnifies financial, economic, and psychological strain.  World history is replete with empires vanquished from exerting too much energy fighting war, and it doesn’t matter whether those lost civilizations were the aggressors or acting in self-defense.  War kills.  Occasionally as in Czarist Russia’s entry into WWI, war has literally been the final straw on a regime already under considerable social strain and ready to cave.  It’s no mere coincidence that the Clinton years, an era of peace, were also a time of dollar strength.

Copyright Larry Greenberg 2009.  All rights reserved.  No secondary distribution without express permission.


Comments are closed.