Hm. I'd forgotten about Guatemala.
I wonder if a full US invasion would mean Guatemala turned out better than OTL? The civil war there was stunningly nasty.
I'll outline some reasons below why Guatemala might have turned out better in the long run in this scenario. My short answer is that Guatemala could have turned out better with a war like this, but that doesn't mean the war would be controversy-free, or that the residents and historians of the timeline would be any happier with their real history than they were with OTL's history [which they don't know anything about, after all].
a direct military intervention by the US in Guatemala, may have a lot of negative repercussions in the short them, but in the long term it could be beneficial to the US as it means that the Small Wars Manual won't go out of fashion and the US Army won't forget that the Marines know how to fight and win guerrilla wars. This could radically change the way the Vietnam War is fought.
The Small Wars Manual was a Marine Corps document, I wonder if the Marines would handle a Guatemala intervention all by themselves, or if they would be backed up by Army units, and if so, if the Army would follow the manual or an equivalent.
Effects of a Guatemala war in the short-run:
The US will "win" in the strictly military sense.
The optics of an open invasion would however be bad around the world everywhere except the US.
The US would probably have no need for "many flags" but if they wished could be augmented by the most toady of U.S. allies, troops from Chiang Kai-shek*, Somoza, Trujillo, maybe Batista, probably too early for South Korea and the Filipinos are still too busy at home.
Jungle foliage and mountains will be force multipliers for an Arbenz regime that fights, but not insurmountable obstacles.
The Guatemalans resisting the US will have no resupply, dooming them in the medium term.
*ChiNat pilots from Taiwan were used in the coup operation against Arbenz in OTL, Operation PBSuccess. I could see Taiwan being willing to lend a troop contingent to a fight in Guatemala where Chiang can be pretty sure he will get almost all of his troops back after they get some live-fire training. OTOH, it's a precedent of openly inviting non-western hemisphere intervention in the Americas, and many Americans still have a nostalgic attachment to the Monroe Doctrine.
I suspect the Mexican intelligentsia will be enraged by the US war in Guatemala, and Mexico City will seek to distance itself from US policy, maybe acting as a mediator if they are gutsy, but they will be careful not to violate any red lines that could provoke US intervention in Mexico. Same for any other Latin American country.
If the US follows the Small Wars recipe there will probably be less waste in the war than otherwise. *If* there is no US intervention in Vietnam or Laos in the 1950s, but that comes in the 1960s, it might be remembered then, as General Finley suggests. It could have positive, but likely not decisive, effects on the ground in Southeast Asia to stick to a more self-conscious COIN approach.
The US could sideline some of the most reactionary factions on the Guatemalan side.
The most interesting effects of a US war in Guatemala in 1954 would be more cultural and demographic and economic:
1. A lot of money pumped into the Guatemalan economy. That would be inevitable, especially if a substantial US troop presence lasts in the country for more than a few months.
2. War brides. There will be lots of them. If you think the occupation of Japan and the Korean and Vietnam Wars resulted in a lot of war brides and US connections to local charities, orphans and migrants, you ain't see nothing yet. The Guatemalan girls are Catholic and in the higher classes brunette caucasians, more Americans will be able to converse with the Spanish-speaking girls. More Guatemalan Dads will approve of matches with Norteamericano "rubios" and "gringos" than Asian Dads.
3. A side effect of the war will be the creation of at least a small Guatemalan community in America, which will grow in later decades with further remittances and migration, even if the community is mainly assimilationist.
4. Additional money in Guatemala could lead to a bigger infrastructure and more thorough central government penetration throughout the countryside, increasing urbanization and the rate Spanish language acculturation by indigenous people.
5. Maya themes in particular and Latino themes in general will show up a little bit more in US arts and literature and pop culture.
6. Protestant evangelization in Guatemala in particular and Central America in general, will catch fire earlier.
7. In the US, "Guatemalan" might become more than just part of a "Spanish" mass. It might be as well known an identity as Puerto Rican. Maybe Maria in "West Side Story" is Guatemalan and not Puerto Rican.
Of course an intervention that is very quick, very "clean" and sees a rapid turnover to approved Guatemalan authorities and relatively complete US military withdrawal could negate factors 1 through 7 above, to one degree or another.
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