On September 11, 2001, al-Qaida, then sheltered by the Taliban rulers of Afghanistan, bombed the World Trade Center and the Pentagon. In response, during the winter of 2001-2002, we attacked Afghanistan, driving al-Qaida and their Taliban protectors out of the country. The Taliban had ceased to be an organized force. We had won!
American troops had been welcomed as liberators in the Afghan countryside because the Taliban had banned the cultivation of the opium poppy in 2001, a disaster for the Afghan farmers whose chief crop was the poppy. The graph shows the 2001 drop-off in Afghan opium production.
As the supply went down, the price of opium poppies skyrocketed. According to the United Nations Office of Drugs and Crime (UNODC):..
An abrupt decline of illicit opium poppy cultivation was recorded in Afghanistan in 2001, following the ban imposed by the Taliban regime in its last year in power. Despite the existence of significant stocks of opiates accumulated during previous years of bumper harvests, the beginning of a heroin shortage became apparent on some European markets by the end of 2001. Furthermore, the absence of the usual harvest in Afghanistan in spring 2001 and the subsequent depletion of stocks pushed opium prices upwards to unprecedented levels in the country (prices increased by a factor of 10), creating a powerful incentive for farmers to plant the 2002 crop. (p. 3)
There is an important economic lesson here. You can't stop an addictive drug by interdicting its supply. Addicts will demand the drug, no matter what the price. If you want to reduce consumption, you have to cut demand, not supply.
After the U.S. victory, the UN was anxious to prevent the resumption of opium planting. In February 2002, the UNODC (then called UNODCCP) conducted a quick survey which revealed the resumption of opium planting. That's when President Bush snatched defeat from the jaws of victory. With UN bureaucrats cheering from the sidelines, he used American troops to conduct an unsuccessful eradication campaign which turned the countryside against both American troops and UN surveyors, as the UNODC noted:
We have a leadership deficit in Washington D.C.. No one in position of authority is willing to authorize the military commanders to utilize any of the logical ideas in your article.
Alas, no new strategy will be implimented. (Hey gang, let's do the surge again. This time in Kabul.) Victory will be declared, and the troops will be recalled, when American Taxpayers are forced to pay for the wars viz. Higher Income taxes, Higher Inflation, and a lower standard of living.
[An] extensive argument for balanced trade, and a program to achieve balanced trade is presented in Trading Away Our Future, by Raymond Richman, Howard Richman and Jesse Richman. “A minimum standard for ensuring that trade does benefit all is that trade should be relatively in balance.” [Balanced Trade entry]
Journal of Economic Literature:
[Trading Away Our Future] Examines the costs and benefits of U.S. trade and tax policies. Discusses why trade deficits matter; root of the trade deficit; the “ostrich” and “eagles” attitudes; how to balance trade; taxation of capital gains; the real estate tax; the corporate income tax; solving the low savings problem; how to protect one’s assets; and a program for a strong America....
Atlantic Economic Journal:
In Trading Away Our Future Richman ... advocates the immediate adoption of a set of public policy proposal designed to reduce the trade deficit and increase domestic savings.... the set of public policy proposals is a wake-up call... [February 17, 2009 review by T.H. Cate]