The most important thing to bear in mind as we try to see the future is that the terrorism has religion at its core. If our political leaders make their policy decisions with that thought, we will have a more positive outcome than if they decide the issues are primarily political. The latter approach would lead to an escalation that would dwarf the horrors we witnessed today, including the use of nuclear weapons. I’ve believed for several years that unless the world’s religious leaders -- Jewish, Christian and Muslim -- could find common ground in the disposition of the Holy Land, the conflict would escalate as it has. In January 1998, I wrote a website memo to Sen. Jesse Helms, then chairman of the Foreign Relations Committee, warning that unless we took the trouble to understand why the terrorists struck the World Trade Center in 1993, they would be back and finish the job by bringing down both towers. If our government had taken that trouble, it would not have been bombing Iraq’s “no-fly zone” in the last several weeks as the tensions and conflict over the West Bank escalated. The Rumsfeld Pentagon seemed determined to unify the Muslim world against Israel, goading for a fight.
The first impulse of the electorate will be to lash out and bomb whomever we think responsible, and there may be some of that. But the political establishment will soon, by tomorrow I think, decide that lashing out will produce an Arab-Israeli war that only will end when another six million Jews are liquidated by a billion Muslims, or Israel uses its nukes to blow up the Muslims. In the Bush administration, my expectation is that Rumsfeld will make the argument for war, Secretary of State Colin Powell will ask for calm, and Vice President Cheney will come down with Powell. When I met with Cheney in January, I told him the only reason I could vote Republican last year was because he was on the ticket, and that he had the confidence of the Arab world as he had sided with Powell in 1990 when the hawks wanted to march to Baghdad, slaughtering Iraqi soldiers who had given up every step of the way.
There is surely a great debate going on inside the American Jewish Committee on how to proceed, and my guess is that it will shy from escalation. Its role has been to prevent another Holocaust and it must see the possibilities here of another. Yes, some Palestinians are dancing in the streets, but the rest of the Islamic World will have mixed feelings. The Taliban denies Afghanistan was involved and I believe it. This could not have been the act of a government or there would have been a leak of such an elaborate exercise. This was the private enterprise of religious fanatics, the Muslim McVeighs who see no solution in secular venues -- which makes it harder for us to strike back. Now you see why I have spent so much time talking to Louis Farrakhan of the Nation of Islam, believing he could be an honest broker among the religious leaders for a deal in the Holy Land. The political part of a land dispute could be settled by having the world's Jews buy up the settlements on the West Bank. I would gladly chip in. It is the Holy plots that have no price tag, with which secular Jews have not been able to come to terms. They have continued to insist that Yasir Arafat had the best possible deal at Camp David last year, although they will admit that if he would have accepted it, he himself would have been assassinated by fanatics. I’m also waiting to see what else the Pope has to say about this cataclysm. His words will count on this.
My first thought is that the markets will become unglued only if the Rumsfeld team wins with an eye-for-an-eye argument, even though we do not know whose eyes we are dealing with. Certainly the added risk of doing anything anywhere will add to declines in consumer confidence and take bites out of equities, at least at the opening tomorrow. But if cooler heads prevail in the Bush administration, the work force will soon creep back into some semblance of adjustment – and we will be left with nothing more than the humdrum Deflation Monster.