We need another Ottoman Empire

Michael Kane writes: Re. “Rundle: embracing Islamists abroad while fomenting terrorism at home” (yesterday). Despite various commentators and Left political groups declaring  our latest crusade in the “Middle East” (such an anachronistic European epithet) is a cynical exercise by evil Tories, they have it wrong.  I think the PM and other like thinkers genuinely believe this is a war against the infidel Muslim and as such are in direct spiritual communion with Pope Urban II in 1095 with his call to take Jerusalem.

Of course the first mediaeval crusade was vaguely successful (think Desert Storm and Kuwait), but the next 200 years were decidedly not, ending with the retreat from these lands by Europe for 600 years. And now we repeat this. No sane historian, no person reasonably acquainted with the “witch’s brew” (and the PM is right about that) can possibly believe  that the US, Europe or bits thereof, and their crusader allies can do anything except repeat strategic and cultural disaster.

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There are five nation states that matter in the whole region; three of them — Iran (Persia), Turkey and Egypt — have been around in various forms for a lot longer than Europe or the United States. Two others, Israel and Saudi Arabia, are products of British/French war aims in World War I.  Israel is both a European and International Jewish construct, Saudi has oil and nothing else. The rest of the region is simply up for grabs, and the five key states will variously support any group, any militia that can deliver their perceived national interests. The coalition of whatever we are this week are doomed to repeat tragedies and potentially bring the war to their own homeland.

In truth we need a new Ottoman or Persian empire and Australia should go off about our business of becoming a real part of Asia. This is about diplomacy and an understanding of Australia’s key regional interests — and they are not in Iraq, Syria or for that matter the Ukraine.

A US frigate?

Don McKinnon writes: I was intrigued by Guy Rundle’s story in today’s Crikey of an attack on naval dockyards in Karachi “… with al-Qaeda militants commandeering a US frigate, and making some attacks towards US vessels …”. On looking it up I found it was a Pakistani frigate.  Still interesting, and something I’d never heard of. But quite different from it being an American frigate.

The state of France’s economy

Paul Sloan writes: Re. “Mon dieu! Can Socialists really manage an economy?” (yesterday). An entertaining question, but we cannot compare Britain to France. Britain is an independent country with its own central bank. France is essentially a “state” in a confederation of states that are all subject to the “foreign” European Central Bank. Unlike the British, the French have lost their economic sovereignty, and so their governments (whatever flavour) cannot make policy choices over interest rates, employment levels, etc.

We do not draw comparisons between the NSW government’s and the Australian government’s budget deficits and government debt. The NSW government has real debt obligations, whereas the Australian government is indebted to itself. France is indebted to a “foreign” entity, the ECB, whereas the British government is indebted to itself. Because the British government is the issuer of pounds, its capability to pay for anything denominated in pounds is infinite; it can instruct the Central Bank to issue a payment. But the French government’s capability to pay for anything denominated in euros is limited to the euros the government can extract from its economy.

Regardless of the flavour of Britain’s national government, Britain had the tools to lift itself out of the 2008-09 depression. France did not.

This excellent article demonstrates the powerlessness of states to determine and deliver economic outcomes. France — like the rest of the ECB-controlled countries — is powerless. Central governments in combination with their central banks are the ones who create a nation’s economic environment: for economic expansion or contraction.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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