Frank Gaffney

American capitalism - led by and caricatured as the financial industry centered on Wall Street - is predicated on the notion that the market is driven by fundamentally economic motives. To its admirers, that means its dynamics are dictated by profit motivation. Wall Street's critics call it greed.

The rules and regulations that govern our stock transactions largely reflect this assumption. We discourage undesirable behavior primarily by levying fines and otherwise making it costly to engage in it.

Forgive the obviousness of this question but, what if actors who are interested in affecting our stock market and economy more generally are motivated, not by making money, but by some larger strategic interest? In that case, financial disincentives are likely to prove completely ineffectual.

For example, would our present Maginot line of financial defenses - much of them constructed by legislators bearing names like Chris Dodd, Barney Frank, Paul Sarbanes and Michael Oxley - protect us if avowed enemies of this country sought to inflict a major, and possibly decisive, blow against us, and didn't care if they lost money in the process?

This proposition is explored in a riveting book that will be published later this month by one of my colleagues, Kevin D. Freeman, a Senior Fellow of the Center for Security Policy. In fact, as the title of Secret Weapon: How Economic Terrorism Brought Down the U.S. Stock Market and Why It Can Happen Again suggests, Freeman's thesis is that it has already occurred, with devastating effect. And that worse may yet be in the offing.

By training a certified financial analyst who worked for a decade with one of the giants of modern finance, investment maven Sir John Templeton, the author knows his stuff. Among other things, Freeman reminds us that U.S. enemies - potential and actual - have repeatedly served notice that they understand our market's vulnerabilities to attack.

For instance, in 1999, two senior Chinese colonels wrote an officially sanctioned book entitled Unrestricted Warfare. It identified "bear raids" on stocks to trigger a market collapse as the first in a long list of unconventional weapons that could devastate America.

Frank Gaffney

Frank Gaffney Jr. is the founder and president of the Center for Security Policy and author of War Footing: 10 Steps America Must Take to Prevail in the War for the Free World .
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