Governments are advised to go out of their way to make sure that back-up systems in terms of medium-to-long-term food supply, fuel supply and medicine supply are in place so that the consequences of a breakdown in the system of global trade can be minimised.
President Barack Obama may have quietly placed the United States on a war preparedness footing, perhaps in anticipation of an outbreak of war between Israel, the West, and Iran. A newly-propounded Executive Order, titled “National Defense Resources Preparedness,” renews and updates the president’s power to take control of all civil energy supplies, including oil and natural gas, control and restrict all civil transportation, which is almost 97 percent dependent upon oil; and even provides the option to re-enable a draft in order to achieve both the military and non-military demands of the country, according to a simple reading of the text.
Intriguing. Certainly, the last few occupants have spent more time planning for the democratisation of the middle east than considering the contingencies of a breakdown in global trade. At least they are aware of the fragility.
But government officials warned that bin Laden was about to strike in Summer 2001. They were aware of a fragility then, too. But that was not enough.
The real question then, is whether these late and frankly emergency measures will be sufficient. Of course, there is no time like the present to address the problem of Western weakness to global trade fragility and external resource dependency, and the fact that we are extremely vulnerable to energy shocks, resource shocks, and trade shocks. It should be noted, though, that we shouldn’t be in this place at all. Our dire position today has been built slowly decision by awful decision, over decades.
So is putting the U.S. on a war economy footing really addressing these problems? Frankly, it strikes me of power-grabbing panic. With the middle east and much of Eurasia on edge, a disastrous trade shock or energy shock could be with us any month now. The threats to America’s economy from a global trade shock are very real, but this policy just looks like a power grab:
Specifically, Obama’s plan involves seizing control of:
- “All commodities and products that are capable of being ingested by either human beings or animals”
- “All forms of energy”
- “All forms of civil transportation”
- “All usable water from all sources”
- “Health resources – drugs, biological products, medical devices, materials, facilities, health supplies, services and equipment”
- Forced labor ( or “induction” as the executive order delicately refers to military conscription)
The economy the United States needs to be robust to global trade shocks and wars is a decentralised one. A key example is energy generation. If every house and business facility has its own energy source (e.g. solar panels, wind turbines, etc) then that nation is robust to shocks to the electrical grid. If every house and business facility has stored food and fresh water supplies than that nation is robust to short-term trade breakdowns.
It is completely unsurprising that the Obama administration has written a panic-stricken executive order. But I see no evidence that this will do a shred of good. Such powers could be used for great evil.