Friday, June 06, 2008


After WWII, the USA engaged in the European Recovery Plan, also know as the Marshall Plan, named after Secretary of State George Marshall. Under this plan, Western Europe received 13 billion dollars of aid, assistance and "loans" from the US. The word loan was put in quotes because Finland was the only country to ever fully pay off the notes.

The plan lasted from 1947 to 1951 and, with the exception of Germany, in just four years, the nations assisted saw a complete recovery to economic levels reached prior to the devastation of war. Russia chose not to participate in the US largess but instead extracted reparations from East Germany, Finland, Hungary and Romania. Russia saw the largess of the US as an attempt by the USA to become a dominate force in Europe and thus fanned the flames of the Cold War. Today, historians argue about the effectiveness of the plan.

Condi Rice has made the point to Iran that the US does not have permanent enemies. No matter what you think about the effectiveness of the Marshall Plan, it and many other programs and actions by the USA proves Condi's point. The USA just gave many tons of food to North Korea. The US is engaged in trade with Vietnam. The US and Russia just executed a major civilian nuclear power agreement.

A key lesson that has been learned is that out right gifts of humanitarian aid are appropriate and helpful for hungry people but they do not produce economic revival. Trade agreements, which benefit both sides, are the stuff that makes for economic prosperity. Bush and Rice are trying to move negotiations forward with these facts in mind.

World maps are constantly being redrawn. Iraq, for example, has been ruled by Ottomans, Persians and Englishmen. After WWI the league of nations redrew the map of this area in 1921 and again in 1925. The Soviet Union was split into many pieces about 20 years ago. However, as nations become economically strong, they become less interested in taking over their neighbors territory. The more countries trade with one another, the more likely they support the status quo of borders.

The USA is not attempting to put Iran out of business. Indeed, the list of economic deals that are in the works is a long list. The USA has no interest in making Iran a permanent enemy. We have no desire to stay in Iraq for 100 years. What the USA wants is to establish business relations between Iran and the rest of the world, to make it in Iran's best interest to cease support of terrorist and to reduce the threat of nuclear war.


The current international situation is as rare as they come. It is not often that the UN security council votes 15 to 0 or 14-0-1 on anything of importance. Russia, France, Germany, UK, USA, China, India, Pakistan, Israel and Saudi Arabia are all of one mind in regard to Iran's nuclear weapons.

Iran is a resource rich nation and its location is of strategic importance. The world does not want to isolate this nation. The world wants to buy natural gas and oil from it. In dollar terms, Iran can easily sell 4 times as much oil and gas as it currently sells and it wants to do so. The leaders need to give up on their dreams of dominating the region. The people of Iran should live a good and prosperous life. Israel does not need to be wiped off the map in order to elevate the status of Iranians.


Just a few days ago, the prospects for a deal looked good. When Iranian officials proposed that nuclear fuel be produced on Iranian soil by a consortium of nations and under the supervision of the IAEA, it appeared that a major break through had been reached. There are still major sticking points. The Saudis, the USA and others want to know that Iran will not try to take over Iraq. The insurance policy wanted is for the USA to execute a deal that allows US troops to stay in Iraq, similar to the way they have stayed in Germany and Korea. As our actions in these nations demonstrate, the desire is not to have a base from which to attack but a base from which to protect.

Iraq is a "demonstration project". The success of the Iraqi government will show that various ethnic groups can form and operate democratic governments in the Middle East. The pending oil deal in Iraq is important. Kurdistan, the northern region of Iraq, appears ready to concede Kirkuk to the joint control with the central government in exchange for regional control of oil fields.

The story here is that diplomacy is, was and will always be complicated. While it sounds crass and greedy, what we have learned is that economics is the key to diplomacy. One leader will turn his back on the other if there is a profit in it. Iran was upset when it realized that the pending peace deal between Syria and Israel was designed to limit the ability to Syria and Iran to meddle in the affairs of Lebanon and Palestine. Iran is like a cornered animal. It can find no way out but it can bear its teeth and make a lot of scary noises.

Again, the diplomatic purpose is not to trap the animal. The USA really would like to make new friends. The USA has no permanent enemies.