Washington, DC – House Armed Services Committee Chairman Ike Skelton (D-MO) delivered the following remarks in the U.S. House of Representatives today concerning the security challenges arising from the global financial crisis: 

 “Mr. Speaker, 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.  And a serious economic crisis preceded the French Revolution.  So the record is clear that economic crises can have consequences for national security of the highest order.  Here in the United States, our economic strength has always been the foundation for our national power and our national security.  Economics plays no less important a role in the fate of many other nations.

 “Knowing this, the House Armed Services Committee decided to explore how the current global financial crisis is affecting national security by holding a hearing last week with a distinguished panel of economic and national security experts.  We had been working to hold such a hearing since November, but the urgency of this effort was only emphasized when the Director of National Intelligence, Admiral Dennis Blair, stated in this annual threat assessment that the global financial crisis represents the primary near-term concern for U.S. national security.  During our hearing, we learned more about the many ways the world has been thrown into serious turmoil by this sudden global shock, and that many if not most of the international consequences are yet to come.

 “We learned that 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 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.

 “While most of the experts we heard from agreed that the strongest economies will weather this storm, it is the fragile states that worry me the most.   Emerging democracies throughout Eastern and Central Europe, Africa, and Asia will turn to the Western world for support.  If we cannot or do not help them, they may be forced into economic alliances of necessity with long–term consequences.  When Iceland recently turned without success to its friends in the West, it found a 'new friend' in Russia.   Jamaica has received significant financial assistance from China.  The list of countries in critical regions in need of such assistance is long indeed.  Economic pressures within European countries might even become so severe as to seriously weaken or unravel the ties that bind the countries of the European Union and the NATO Alliance together.

 “Perhaps most serious, at a time when U.S. leadership is sorely needed, our international credibility is at an unprecedented low.   The crisis is causing emerging nations to question the Western model of market capitalism.  Flawed policies, poor decisions, weak regulation, and questionable behavior have lead to a widespread perception that American-style capitalism is unsustainable.  This perception may be the most corrosive effect of the current crisis.

 “Mr. Speaker, our response to the global economic crisis must be far reaching and far seeing.  We must 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.  We must support our friends and maintain our alliances.   We must not become so self absorbed that we fail to recognize our long term strategic interests.  And we must be very clear, in today’s world a strong national defense is not a luxury, it is an imperative.”