The debate over who will pay to fix all the stuff broken in the war with Iraq is heating up. Europe would like to contribute what amounts to a token sum, Japanese sentiment is not exactly feeling generous on the issue, and the United States Senate would like to shift half the burden to Iraq. This would amount to roughly 17% of Iraq’s 2002 Gross Domestic Product — 17% of every dinar spent in the whole country last year. This does not reflect debts Iraq owed before the war. By way of comparison, the entire national debt of the United States amounts to roughly 66% of the GDP.
However much we believe in self-reliance, telling Iraq to pay for the reconstruction of their country themselves is like telling a child to go earn money for his own dinner. Since we broke it in the first place, it’s like having to pay to repair your car after being hit by an uninsured driver. And some of the things we wanted to implement were esoteric to say the least: Zip codes; state of the art garbage trucks; one month courses in how to be a businessman. And that’s just some of the stuff that was taken out.
Now that we are giving the people of Iraq the dubious gift of an American style national debt, we would also like to give them a Western style central bank. They do have a central bank, of course — where else would the Husseins have kept their money? But as it stands, the Central Bank of Iraq is more like a Treasury Department and Mint. This makes them very different from our Fed, which buys and sells bits of the national debt, controls interest rates, and controls reserve rates — the amount of actual assets your bank or brokerage has to have on hand. You remember, like in George Bailey’s speech about how the cash wasn’t in the bank, but in all the houses they helped people buy.
Islamic banking is hampered by the Qur’an’s prohibition against charging interest. So our theoretical Iraq Fed will not necessarily have interest rates to tamper with. This also means there will be little to regulate in the way of reserve requirements — certainly nothing that requires regular non-legislative meddling. So the theoretical Iraq Fed will have nothing to do but muck about with the national debt, see above. Critics call it “prone to fiscal abuse from a provisional government and future Iraqi governments with more proposals for expenditure than probable sources of revenue.” Iraq needs a Fed like a diabetic needs a donut.
However, it is now clear that we can stop looking for Saddam Hussein. Yes, that’s right, neither he nor Osama are the real enemy. Lt. Gen. William “Jerry” Boykin informs us that the real enemy is none other than Satan himself.
Whatever your views on the General’s theology, applying it to the War on Terror poses a very serious problem. Under his world-view there are only 3 possible ends for the War on Terror: the annihilation of the “Christian” world; troops marching into hell to personally kill Satan; or Armageddon.
Even winning is losing. Maybe we ought to keep looking for the proverbial “devil you know.”
Nice post (linked over from the Chief). I’d like to mention that I had read some material related to the usury situation for Muslims. Evidently, banks in the US are trying to create banking products that avoid interest, since it is the interest which is the issue for Muslims. There are several instruments, all of which change an inflated base price that already has the “interest” accounted for. IIRC, one instrument just combines the principle and interest into the amount borrowed and the payments are calculated from that. The other instruments were more along the lines of lease-to-buy.
PS. Watch out for overdraft charges. It is the equivalent of 300% + interest. Legal loan sharks…
I question your statement that “we broke it in the first place”, as I seem to recall a certain fellow named Sadam that neglected general infrastructure in favor of building palaces and systematically denied services to certain “undesirable” elements. He certainly couldn’t have had a hand in the condition of Iraq today, could he?
> Since we broke it in the first place
Um, not quite. While its true that some of the repairs are for things we broke, a lot of it is for stuff that Saddam broke. For example, I read a couple of weeks ago where the Seabees got an irrigation pump station running that irrigates 100,000 acres of land that was useless until the pump was back up. It was Shite land, you see, and Saddam had shut the whole deal down three years ago…
Other stuff, like many schools, were broken by Iraqi troops who used them as barracks and storage areas.
In any case, we need to fix all of it and get Iraq back up and running.
As for banking, there are other ways. From the Dubai Islamic Bank, we find:
The economic and business philosophy of Islam encourages generation and sharing of profits. However, it forbids giving or taking of interest. Dubai Islamic Bank is the first Islamic bank in the world to practically implement this concept. Leveraging the strengths of Islamic business and economic concepts on one hand and state-of-the-art banking technology on the other, DIB creates partnerships with its customers to generate profits, which are then shared with them. DIB has created a vast array of Islamic banking and finance products to suit every conceivable need of its customers.
(see http://www.ameinfo.com/news/Detailed/28873.html )
Interest can come in many forms, not all of which are prohibited in Islam.
That which does not kill us makes us stranger.
Ethics is not necessarily the handmaiden of theology.
Anyone can learn from pain.
enough–scientists go for Bach)