Ike Skelton, Chairman
For Immediate Release: March 11, 2009
Opening Statement of Chairman Ike Skelton (D-MO)
Hearing on Security Challenges Arising from the Global Financial Crisis
Washington, DC – House Armed Services Committee Chairman Ike Skelton (D-MO) delivered the following opening statement during today’s hearing on Security Challenges Arising from the Global Financial Crisis:
“The committee meets today to hear from a distinguished panel of experts about security challenges arising from the global financial crisis. In November of 2008, this committee initially set out to hold a hearing on this topic but for a variety of reasons, we were not able to make the schedule work then. Consider, briefly, what has happened in the intervening months.
“The U.S. financial crisis has widened into a global economic crisis. Our unemployment rate has increased from 6.8% in November to 8.1% in February. The governments of Iceland and Latvia have fallen as a result of the crisis, and others are likely to follow. Three of our most important partners in the Muslim world, Turkey, Indonesia and Pakistan, all face acute balance-of-payments crises. And the Director of National Intelligence, Admiral Dennis Blair, has concluded that the crisis represents the single greatest threat to our national security. In short, we face a world that has been suddenly transformed, and not for the better.
“Students of history know that hyper inflation in Germany was a significant factor in the rise of Hitler. The economic decay of the Soviet Union led to regime change across Eastern Europe. So we know that economic crises can have consequences for national security of the highest order.
“Here in the United States, our economic strength has been the foundation for our national power and our national security. It is reasonable to assume that economics plays no less important a role in the fate of many other nations.
“At a minimum, the global financial crisis will exacerbate an already growing set of political and economic challenges facing the world. In country after country, the crisis is increasing citizen discontent and anger toward their leaders and providing an excuse for authoritarian regimes to consolidate their power.
“It is causing emerging nations to question the Western model of market capitalism. It heightens the always ongoing tug-of-war over budgetary resources and international assistance at a time when millions are being pushed into poverty. It distracts and strains our allies and generates conditions that could provide fodder for terrorism.
“Financial turmoil can loosen the fragile hold that many countries have on law and order and increase the number and size of ungoverned spaces. Perhaps most serious, at a time when U.S. leadership is sorely needed, our international credibility is at an unprecedented low.
“In my view, our response to these challenges must be to restore our economy, maintain and enhance our key instruments of national power, including the Department of Defense, and take an approach with the world that reestablishes our credibility and claim to world leadership.
“Let me be clear, in today’s world, a strong national defense is not a luxury, it is an imperative. I’ll be interested to hear our witnesses’ views on the likely demand for our national defense capabilities in the current environment.
“With that opening, let me briefly introduce today’s witnesses before turning to my colleague John McHugh for his opening remarks. Today we have with us Dr. Richard Haass, President of the Council on Foreign Relations and former Director of Policy Planning for the State Department. Dr. Richard Cooper, Professor of International Economics at Harvard University, former Chairman of the National Intelligence Council and former Chairman of the Federal Reserve Bank of Boston. Dr. Dov Zakheim, former Under Secretary of Defense (Comptroller) and Chief Financial Officer of the Department of Defense. And Mr. David Rothkopf, visiting scholar at the Carnegie Endowment for International Peace and former Acting Under Secretary of Commerce for International Trade. Gentlemen, welcome all, and we look forward to getting your insights on today’s topic.
“I now recognize Ranking Member John McHugh for such comments as he would like to make.”
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