The financial markets are of course moving with risk assessment of war or peace, with the greatest attentiveness to unfolding events in Afghanistan and Pakistan and the debate in the Bush administration between Pentagon and State. When Wall Street opened Monday, it held up well until Bloomberg reported President Bush’s statement at 11:59 about wanting Osama bin Laden “dead or alive.” From being down 350, the DJIA went down 650. On Tuesday, the market rallied in the morning and nose-dived when Bloomberg reported at 1:30 that Defense Secretary Don Rumsfeld was doing some serious saber-rattling. The actual statement was not as harsh as the headline, though, and within the half hour the market was rallying again. This morning, the rally crashed two minutes after Reuters reported at 10:04 of protests across Pakistan demanding a Holy War against America if Osama bin Laden is turned over to the West. The demonstrations coincided with a gathering of clerics in the Afghan capital Kabul that could issue a call for jihad, or a religious war, against the United States and its supporters. Maulana Sami-ul Haq, chairman of the Pakistan Defense Council that includes 35 pro-Taliban Islamic groups, also warned Pakistan's military leader, General Pervez Musharraf, against backing the U.S. campaign against the Taliban and their ‘guest,’ bin Laden, reported Reuters. "If the ulema (the clerics) give an edict of jihad against American aggression and they also use Pakistan for it, then the entire ulema of the Islamic world and Pakistan will have to support that edict of jihad," Reuters quoted Haq as saying.
Now that President Bush has identified bin Laden as the bad guy who must be turned over by the Taliban as a minimum, that’s the margin between war and peace. The Taliban might conceivably turn him over if its conditions were met, the most important being that the clerics of 50 countries meeting in Kabul sign off on extradition. Think of it as a grand jury making a determination that there is reasonable cause to think of him as being behind the terrorism of Sept. 11. As The Wall Street Journal reports on its front page today, it is proving to be extremely difficult to come up with evidence of his involvement, which he denies. Complicating the matter further is the fact that the terrorists clearly were part of an Egyptian network. If the clerics reject U.S. demands for Bin Laden, the Pentagon may present the option preferred by the civilian hawks who have long argued that instead of tracking down individual terrorists, we take military action against countries we know have been harboring their networks. Chief among these is Richard Perle, chairman of the Defense Policy Board, and his protégé, Paul Wolfowitz, Rumsfeld’s deputy. I wrote about Perle on my website yesterday and recommend you take a look.
I now consider these two men the most dangerous the world as they are pulling the strings at the Pentagon and in the Sharon government in Israel. They are intent on trying to shift the White House focus to Iraq. Jim Woolsey, our CIA director in the first two years of the Clinton administration and a Perle protégé, now insists the Muslim who bombed the World Trade Center in 1993 was not an Egyptian, but an Iraqi in disguise. As long as there remains blind outrage in our national population (and you should see my hate mail), there remains the possibility the President will be pushed into taking action somewhere, perhaps commando raids into Afghanistan or Iraq, with assassination in mind. These risks now seem contained as Vice President Dick Cheney and Secretary of State Colin Powell dominate the policy debate, but as long as Rumsfeld listens to the civilian hawks and pushes for action we have to worry. It was Rumsfeld, the national chairman of the Dole/Kemp campaign in 1996, who maneuvered Perle and Wolfowitz into the top advisory roles in that campaign. When Clinton bombed Iraq to kick off his campaign on Labor Day of 1996, with no provocation from Baghdad and in violation of the War Powers Act, it was a perfect opportunity for Dole to challenge him, but with Perle and Wolfowitz at his side, Dole instead saluted while other Republicans criticized Clinton for not carpet bombing a country that had already lost 1.5 million civilians to our embargo. We will keep on top of this as best we can, at the moment still confident Bush will make the right decisions. We can’t forget the overlay of the monetary deflation, though, and wait to see what Alan Greenspan has to say about it tomorrow, before Senate Banking.