In the debate over the Mexican bailout last January, U.S. stockbrokers, the Mexico lobby, and the mainstream media pressed hard for the rescue package. Their argument rested on the premise that economics had replaced military action as the basis for national security in the post-cold war era. Washington Post columnist Jim Hoagland wrote that the Mexican peso crisis was to Bill Clinton what the Gulf War was to George Bush and urged the administration to use financial weapons to “preserve an ally whose collapse would be politically and economically disastrous.”
There is a case to be made for an economic interpretation of the national interest in an international system increasingly dominated by global commerce. But the better military analogy to the peso crisis was Lyndon Johnson’s escalation in Vietnam, when Washington’s “best and brightest” led the nation step-by-step into disaster....
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