The Ugly Americans II
Jude Wanniski
October 7, 1997


When the French Total Oil Group announced last week that it would ignore the Iran-Libya Sanctions Act and invest $2 billion in Iranian energy development, we could hear the cheers not only of French Prime Minister Lionel Jospin, who “rejoiced,” but also of the rest of the world. Political leaders everywhere are fed up with the arrogance of our political Establishment, which since the end of the Cold War has been playing Big Daddy in the family of nations. A fatherly role is appropriate, but there is more to fatherliness than dictating do’s and don’ts against the threat of trips to the woodshed. Both the Iran-Libya Sanctions Act and the Helms-Burton Act (which threatens economic sanctions against foreigners who do business with Cuba) represent the arrogance of power of an America that acts as if these were the spoils of war. We addressed this problem in a client letter sent May 8, 1995, entitled “The Ugly Americans”

The term ‘ugly’ American was coined in the 1950s and was meant to convey the stereotypical attitude of Americans abroad following our victory in World War II. We were the winners and By God we were the richest and most powerful people on earth. This gave us the authority to stomp around the planet, spreading the American dollar in public aid and private extravagance, and instructing other political leaders how to behave. The protagonist of William Lederer’s 1958 novel, The Ugly American, was actually a sympathetic character, a do-gooder of the 1950’s Saigon, South Vietnam, who inadvertently did more harm than good. In the letters column of The Wall Street Journal this morning, I recalled some of the origins of our involvement in Vietnam and my own youthful support, as a liberal Democrat/Catholic, for President Kennedy’s do-good initiative there. We knew what was best for Ngo Dinh Diem, the Catholic president of South Vietnam and a protégé of Francis Cardinal Spellman. Our best intentions blew up in our faces as the best-and-the-brightest economic blueprints we shoved down Diem’s throat in 1961 undermined the political economy and drew us into the dreadful undertow.

The Wall Street Journal, which gets triumphalist itself at times, is now furious at the French in general and Prime Minister Jospin in particular for helping “in a project that might give Iran the wherewithal to acquire nuclear missiles.” The Journal is also mad at the Russians and Malaysians for going along with the French, although: “We are sympathetic to business groups that are complaining that foreign policy on the cheap through the use of trade sanctions is in danger of getting out of hand....The U.S. and Europe need to work out a common policy toward Iran, one in which Europe would take some responsibility for global, as well as its own, security.” Alas, the Journal really does not want a common policy toward Iran, because the Europeans are essentially uniform in disagreeing with our continued demonization of Iran, which we do almost mindlessly. The reason I wrote the 1995 commentary on The Ugly Americans was expressly because of those Iranian nuclear reactors. At the time, President Clinton was looking around for a way to sound tough on foreign policy, so he yelled at Boris Yeltsin for selling reactors to Iran. Bob Dole and Newt Gingrich yelled even louder. The WSJournal yelled loudest of all, which led us to make inquiries of our own. Here is what we reported to you, 29 months ago: 

What’s going on? Way back in the 1970s, we talked the Shah of Iran into buying two light-water nuclear reactors, construction of which was suspended at the time of the Shah’s overthrow by the Ayatollah. Iran now wishes to complete the project by purchase of two reactors of similar design from Russia for $1 billion. The reactors are of the kind we have now arranged for North Korea to construct, in order to allay our suspicions that Pyongyang was trying to build a nuclear bomb from the plutonium they might extract from the fuel rods in their heavy reactors. Iran, signatory to the Nuclear Non-Proliferation Treaty, is entitled to purchase nuclear reactors for power purposes and has the sunk costs of the old project. Do they intend to build a nuclear weapon? Nuclear scientists generally ridicule the idea that either Iran or North Korea would even attempt to build a plutonium bomb, an incredibly difficult job when compared with whacking one out of enriched uranium. There seem to be, though, a few bureaucrats in the Energy Department appointed back in the Carter Administration, who have an aversion to plutonium, the only kind of bomb that can be fashioned from the spent fuel rods of the reactors we are talking about. Iran in any case has said it would give the Russians back the spent fuel rods, for which they have no use.

To make sure nothing has changed, I called the same sources I talked to in 1995 and was told that the facts were the same. It explains why the Iranians are developing nuclear energy even though they are sitting on big oil reserves. They began the project when it was conventional wisdom that the world was running out of oil. The Journal could make the same inquiries of the sources available to me and would come to the same conclusions. But as a voice of the Establishment, that would be inconvenient. It would force the entire national-security opinion apparatus upon which the Journal depends to admit it has been cooking the books and to stop doing it. Faced with an untenable position, the Journal’s only defense would be that there is always the chance that Iran may be up to no good, and we can’t take the chance it is not. 

This is exactly the same mentality that produced “global warming” as a threat to mankind. The WSJournal ridicules the NYTimes and the environmental zanies for their argument that carbon dioxide -- which is what 6 billion humans and a zillion times as many animals and insects exhale after breathing in oxygen -- is a mortal threat to the planet! Investor’s Business Daily last week reported that a Gallup poll of members of the American Meteorological Society and the American Geophysical Society found that only 17 percent agree that human actions are causing global warming. Yet The New York Times and Albert Gore still believe that “most mainstream scientists” concur on the threat. The Times, which speaks for the liberal wing of the Establishment, is forced to argue that even though there is no sign of global warming, we can’t take the chance it is not occurring. 

What ties all this together is the global “energy crisis” that unfolded as a result of the United States going off gold in 1967-71, which eroded the trustworthiness of the dollar’s value relative to gold and oil. Even that process was nudged along by the political problems that locate in the Middle East, with the ripples that went through the gold and oil markets during the June 1967 Arab-Israeli six-day war. It was Robert Mundell who pointed out to me that the environmental movement began as a result of the world going off gold, with the world extracting resources faster than the planet was prepared to deliver. With the Cold War over, we are now working to repair the damage -- restoring trust to the dollar and world money, restoring the value of contracts (Promise Keepers, the Million Man March, the Pope’s global initiatives), and bending our efforts to fix the seemingly intractable problems of the Middle East. All of this requires considerable shifting of gears by the political Establishment, which always tends toward the status quo and can seem awfully arrogant when it does, despite having our best interests in mind.