On Track to Restart the Cold War


ACRU Staff


March 13, 2014

This column by ACRU General Counsel Peter Ferrara was published on March 12, 2014 on The American Spectator website.

On economic policy, President Obama has consistently and thoroughly followed just the opposite of everything Reagan did. And that is why he has consistently and thoroughly gotten the opposite of Reagan’s results.

Reagan slashed tax rates, with the top income tax rate reduced from 70% when he entered office to 28% when he left. (Federal tax revenues doubled during the 1980s.) Early in his first year, Reagan led Congress to cut federal spending by nearly 5%. Early in his first year, Obama led Congress to enact nearly $1 trillion in utterly wasted “stimulus” spending. Reagan deregulated, Obama overregulated. Reagan backed the Fed to follow strong dollar monetary policies that ended the double-digit inflation of the 1970s. Obama has backed the Fed to pursue loose dollar monetary policies that threaten, ultimately, to bring back the double-digit inflation of the 1970s.

Reagan economic policies consequently led to a historic, generation-long economic boom, from late 1982 to late 2007, what Arthur Laffer and Stephen Moore called in their book, The End of Prosperity, “the greatest period of wealth creation in the history of the planet.” Steve Forbes called it, “an economic golden age.” Unemployment reached as low as 4.4% during the Bush years.

The Reagan economic boom of the 1980s expanded the American economy by the equivalent of adding the entire economy of West Germany at the time, then the third largest in the world, to the U.S. economy. Even at the end of the boom, under Bush, as Forbes has written, “Between year-end 2002 and year-end 2007 U.S. growth exceeded the entire size of China’s economy.”

In sharp contrast, Obama’s consistently anti-growth economic policies have produced the worst recovery from a recession since the Great Depression. In the previous 11 recessions since the Great Depression, all of the GDP lost during the recession has been recovered on average within 4.5 quarters after the recession was started. But it took Obama’s recovery four years to reach that point. America suffered the slowest growth in Obama’s first term of any President since the Great Depression, and long before.

At just the average growth for an economic recovery from a recession, America’s GDP would be $1.3 trillion higher right now. That translates into an extra $8,000 in annual income per family in America. At the same pace as Reagan’s recovery, America’s GDP would be almost $2 trillion higher. GDP is now about 5% higher than when the recession started. At this point in Reagan’s recovery, it was more than 20% higher.

Moreover, in the 10 prior recessions since World War II, America recovered all the jobs lost within two years from when the recession started. Today, more than six years after the recession started, we still have not recovered all the lost jobs.

Now Obama is bringing his reverse Reagan magic to foreign policy and national defense as well. Reagan’s Peace Through Strength defense policies led to America winning the Cold War without firing a shot, in Thatcher’s famous phrase.

But Obama and his sidekick Hillary Clinton self-congratulated themselves on the supposed brilliance of their “reset” policy with Russia and President Vladimir Putin. That childish notion of foreign and defense policy arises from the brilliant “Progressive” insight that Russia was still only aggressive towards the West because of the supposed abrasiveness of Bush and Cheney. Well, Bush and Cheney are long gone now, and what do we see?

One of Obama’s first foreign policy actions was to cancel the agreed deployment of missile defense interceptors in Poland and the Czech Republic, which Bush had successfully negotiated over Russian opposition. Those agreed locations were behind the Iron Curtain during the Cold War, further confirming the stunning victory of Reagan Republican policies. But Obama nullified that Reagan Republican Peace Through Strength advance to mollify the Russians as part of his supposed “reset.”

What possible sense do Russian objections to missile defenses in Eastern Europe make anyway? How can missile defenses threaten the Russians in any way? Is the West supposed to make sure that it remains vulnerable to Russian nuclear assault, so Russia won’t feel “threatened”?

At the time of the missile defense cancellation, Obama assured us all he had a “smarter” idea for better missile defenses to protect Europe and the American east coast, which could be deployed with more advanced technology later at sea. So where is that “smarter” idea now?

Next in the ongoing deconstruction of America’s defenses came Obama’s perverse 2010 “New Start” supposed arms control deal with Russia. Under that “deal,” America’s deployable nuclear warheads are to be sharply reduced from 5,000 to only 1,550, about 10% of what America had at the peak of its defenses. In return, Russia is required to make exactly zero reductions in its deployable warheads.

Is this really a continuation of the enormously successful Reagan/Bush arms control policies with the old Soviet Union? Or does such a deal make any sense any more, now that the old Soviet Union has broken up, and we face multiple nuke threats from more than Russia, like a heavily rearming China, and the almost complete nuke breakout of the Muslim terrorist state of Iran? Or is this just more Obama Calculated Deception to foist his 1960s hippie policy of unilateral nuclear disarmament on an unsuspecting, too trusting America?

At least the people of Indiana had the good sense to bounce out of office Senator Richard Lugar, formerly chairman and then ranking Republican on the Senate Foreign Affairs Committee, who was the key to delivering enough Republican votes to ratify Obama’s New Start sellout to the Russians. Lugar’s Republican primary defeat was well worthwhile, given his severe lapse of judgment in acceding to this deconstruction of America’s defenses, even with Republicans later losing the seat.

Unilateral nuclear disarmament is the indicated motivation based on the absurdist views of Undersecretary of State Rose Gottemoeller, Obama’s top, longtime left-wing arms negotiator. She is now proposing further nuclear disarmament to reduce America’s nukes to just 300. Obama has already indicated sympathy with that view.

But that may not even matter anymore. Nuclear warheads naturally deteriorate over time, and so require periodic testing to ensure their reliability. Our nuclear deterrent won’t deter anything if our missiles are just going to land with a loud thud, and no explosion. Obama, however, is refusing to conduct any such tests, over the objections of Congressional Republicans. Instead, Obama is supporting the proposed Comprehensive Nuclear Test Ban Treaty, which would prohibit any such further testing permanently.

That would end America’s nuclear umbrella for all of our allies, including Israel. That in turn would mean worldwide nuclear arms proliferation, as our allies would recognize that they have to take care of themselves. But such proliferation is not the concern of America’s “progressives,” as long as what they see as the evil America is disarmed. Was Obama the Manchurian Candidate or something?

Neither Russia nor China are restrained by any such test ban treaty considerations. They are both financing, pell-mell, comprehensive nuclear modernization buildups. They seem to know a once in a lifetime opportunity when they see it. Gottemoeller’s response to that: “We are not developing new nuclear weapons or pursuing new nuclear missions.”

That is reflected in the American defense builddown proposed in Obama’s new budget. Obama proposes t
o spend less on national defense than last year, every year for the next 10 years, except for 2024, when he would go back, 11 years later, to the 2013 level for national defense. That would reduce national defense back to the pre-World War II 2.3% of GDP. That is why the Navy, the Air Force, and the Army would all be reduced to pre-World War II levels as well. This is why the Chairman of the Joint Chiefs of Staff was moved to ask before Congress last month, “What happens when our enemies can burn our homeland, and not just our flag?”

Three months ago, Secretary of State John Kerry announced that “[t]he era of the Monroe Doctrine is over.” Moscow replied two weeks later with its defense minister’s announcement that Russia will set up bases in Cuba, Nicaragua, and Venezuela for its navy and for the refueling of its strategic bombers. Who are they planning to bomb?

President Kennedy imposed a blockade on Cuba when he discovered Russians installing nuclear missile launchers there. But from the Obama “progressives,” all we, and Putin, hear are crickets chirping.

So Obama got what should have been the expected response to all this, with Russian troops marching into Ukraine, to seize Crimea to start. Even the reliably liberal Washington Post columnist Richard Cohen recognized the parallels between Putin’s action and Hitler’s first aggression to start World War II. Hitler marched into and seized the Sudetenland from Czechoslovakia supposedly to protect ethnic Germans living there, just as Putin has marched into Crimea, supposedly to protect ethnic Russians there. Even Cohen recognized that just as Hitler did not stop with the Sudetenland, but soon took over all of Czechoslovakia, then seized Poland, and then marched all the way to Moscow, so Putin could also lay claim to protecting ethnic Russians in eastern Ukraine, Estonia, Latvia, and beyond. How far in reestablishing the Soviet empire will Putin go? The answer is easy. Until someone stops him.

This does not mean America must go to war again. Remember, Reagan won the Cold War without firing a shot. America could do that again, with purely economic responses. Conservatives today are reluctant to change the public conversation from the chaos of Obamacare, and the Obama economy. But opening up a well warranted national defense issue would only add to, not distract from, the failures of the Obama Democrats, just as it added to the Reagan Coalition 35 years ago.

But it may already be too late. Even Iran and North Korea will soon have the capability to launch a devastating EMP attack against America, which would require launching a couple of nuclear missiles off of America’s coasts, to detonate miles up in the atmosphere. That would fry all electronics below, throwing America back into the 18th century, with no electricity, and no operative electrical systems, including in cars, trucks, planes, and trains. Even military vehicles below would not be operable.

So forget about even driving to the grocery store, or drug store, or doctor’s office, or hospital. They would all have no delivered supplies any way. That is why a Presidential Commission in 2004 concluded that after such an attack 90% of Americans would be dead within a year.

Obama’s transformation of America is reaching new heights.



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