The money behind terror, and Neocon failure

Loretta Napoleoni is an Italian economist, political analyst and author who is an expert on the financing of terrorism.

She's in Australia at the moment and speaking at the University of Sydney.

Some of her commentary puts an interesting persective on what the so called war on terror has cost us...

Napoleoni writes... " The interdependency between terrorism and the global economy goes well beyond the credit crunch, the recession and the euro crisis. Since September 11 it has been extending the boundaries of a shadow world which threatens to replace our own if we do not break away from the legacy of the ''war on terror''. Bringing the troops home is not enough; we need to focus on the true target of this war, on the lifeline of terrorism - we need to focus on the money. "

Along the way she takes a swipe at some of the Bush administrations more egregious failures and inattentions...

She notes the Patriot Act didn't do a thing to stop terrorist financing, but it did prompt Muslim investors to switch investments worth $US1 trillion from the dollar to the euro. The global demand for the greenback retreated drastically in the wake of this.

Previously too, interest rates were the method of counteracting recurrent economic crises - such the Asian financial crisis. Too-low interest rates only hide problems.
However, for a war-chest going into Iraq, the Bush administration sold billions in treasury bonds, and to make that debt competitive, the Federal Reserve progressively slashed interest rates, which fell from 6% before 9/11 to 1.2% by mid-2003.

Bush and co were asleep at the wheel in the economy, as in everything else, and paid little attention to signs of an overheating globalised economy - the housing boom and growing personal debt.

They also paid too little attention to how terrorism is financed. Perhaps it just wasn't heroic and pyrotechnic enough for neocon tastes.

Others have commented on this neocon attitude that things are only worthwhile if they cost the earth. Or someone's blood.
Dr William Coleman, of the department of Economics at the Australian National University, notes of neocon attitudes: "...heroism is only heroism if it is costly. And the more costly it is, the more valuable it is. Thus a hostility to cost amounts to a hostility to heroism."

That is, it has to be said, a lethal circle.

I'll leave the last word with Napoleoni... " Washington's fixation with military intervention also prevented the formulation of an effective policy to thwart terrorist financing, which nobody ever regarded as a real priority. "