From the Evil Empire to the Axis of Evil
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East Asian markets [was] in place, the U.S. Administration was in a strong position to take advantage of the financial crisis to promote liberalization of trade, finance and institutional reforms through the IMF.’ The impact of the Asia crisis on the dollar was notable. The general manager of the Bank for International Settlements, Andrew Crockett, noted that while the east Asian countries had run a combined current account deficit of $33 billion in 1996, as speculative hot money flowed in, ‘1998–1999, the current account swung to a surplus of $87 billion.’ By 2002, it peaked at $200 billion. Most of that surplus returned to the United States in the form of Asian central bank purchases of U.S. Treasury debt, in effect financing Washington policies. Japan’s Finance Ministry had made a futile effort to contain the Asia crisis by proposing a $30 billion Asian Monetary Fund. Washington made clear that it was not pleased. The idea was quickly dropped. Asia was to become yet another province of the dollar realm through the IMF. Treasury Secretary Rubin euphemistically termed it America’s ‘strong dollar policy.’2 WASHINGTON REVISITS HALFORD MACKINDER Even as it was destroying the Japanese economic model during the 1990s and reshaping east Asia to suit its own interests, Washington placed the highest priority on the dismantling of the Soviet Union. By the beginning of the 1990s, as the Berlin Wall came down and the Soviet Union with it, Washington faced no apparent rival for global hegemony. In the euphoria of the day, few expressed alarm or concern that one country held so much power over the planet. After all, it was democratic, and it was America. With no more threat of Soviet military action, NATO countries, above all the United States, could begin to shift their trillion dollar annual expenditure as a world military sector into civilian uses. A new era of peaceful development, market reforms and capitalist prosperity was the dream of millions in the former communist states of the Warsaw Pact. Those dreams were short-lived. The U.S. establishment was preparing to secure global hegemony for America, as the sole superpower, all the while trying to lull the rest of the world into a sense of false complacency. Deception played a strategic role in Washington policy during the 1990s. The greatest deception, it soon became clear, was the impression that Washington was groping for ideas about where to go after the end of the Soviet threat.
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