The Paris terrorist attacks have inevitably complicated the politics of both immigration and U.S. action in the Middle East.
The tragedy brought home to people that Middle East terror can’t simply be ignored and left to fester. If it grows, it’s sure to appear in our cities.
It also shook up the race for the 2016 nomination, and it’s sure to have an outsized impact on the election itself.
Jeb Bush and The Wall Street Journal have already called for a more substantial U.S. ground force in Syria. At the same time, both deplored any thought of restricting refugee entry to the United States.
Yet that policy seems to me wrong in two ways at once.
Putting more ground troops into Syria is by no means guaranteed to succeed – after all, it didn’t work in Iraq or Afghanistan. But it would aid recruiting into ISIS and other radical Islamic forces, as susceptible youths are told that the U.S. is bound on a crusade against the Muslim faith.
Conversely, allowing unrestricted refugee entry to the United States in the kinds of numbers currently attempting to get there furthers the risk of a Paris-style attack. At least one and possibly two of the attackers arrived in Paris via the refugee route through Greece.
Thus, in my opinion, the opposite combination of policies makes more sense.
The U.S. has no strategic interests in the Middle East. It’s more or less self-sufficient in oil now, and the Middle East is a culturally hostile region in which the U.S. has an unhappy history.
Hence, it makes sense to reduce its military presence on the ground and to conduct fewer air raids/drone strikes, which inevitably take the lives of the innocent as well as the guilty.
Additionally, since a hostile force is attempting to commit atrocities in the West, it makes sense to tighten border controls and reduce both refugee entry and immigration from the region in general, thus making the task of destruction more difficult.
The Economic Implications
Economically, markets had little response to the Paris tragedy. But in the longer term, its economic implications will be substantial and negative.
First, the forces of globalization have suffered another blow. It now appears likely that the EU will restrict or even eliminate the Schengen Agreement, which abolished border controls in 1995.
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Free movement of people across borders is problematic when a significant sect is bent on destruction and uses the privileges of free movement to achieve its ends.
One alternative being discussed would be to restrict the Schengen area to the original core EU, eliminating Greece, Spain, Italy, and the Eastern European members of the current area.
But such a restriction would greatly increase transit costs within the EU, reversing much of the benefits of integration and making the net benefits of euro membership very questionable for some members – particularly the southern European countries that would be outside the new, smaller Schengen area.
Another solution – advocated for years in a number of forums – is to remove the Mediterranean countries from the euro and create a “northern euro” that has greater currency stability and a healthy fiscal position underpinning it.
Meanwhile, the attacks will likely lead to a further rehabilitation of Russia, which is increasingly seen to be on the West’s side against ISIS. Indeed, Russia is being consulted by France as it formulates a military response to the attacks, which follow the bombing of a Russian airliner in Sinai last month.
The ruble has already strengthened on foreign exchanges by about 8% against the dollar since its low point in August, and the MICEX is up about 12% over the same period.
Conversely, the Middle East as a whole is likely to be affected by increasing unrest in the region and by increased restrictions placed on it by the West.
The Gulf states in particular, whose prosperity depends on freedom of trade and people through their hubs, may find themselves geographically restricted in the same way that Austria was during the Cold War.
Finally, if defense expenditures are increased in order to deal with the Syrian conflict – which seems likely in France, at least – budget deficits will widen further from their already excessive levels, increasing the likelihood of a debt crisis down the road.