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Obama’s lost promise |
Strobe Talbott
AS Barack Obama approaches the halfway point in his first term as president, there is growing disappointment over his perceived failure to have lived up to the hopes inspired by his 2008 campaign and election.
That is largely because those hopes were unrealistic. Obama inherited from George W. Bush the In-Box from Hell. The war in Afghanistan was already a disaster, going from bad to worse for six years – with onerous consequences in civilian and military lives lost. On Day One, he confronted a pair of dangerous dilemmas over the nuclear ambitions of Iran and North Korea, and the task of trying to breathe life into a moribund Middle East peace process.
Near the end of the campaign, the global financial earthquake hit, with its epicentre on Wall Street. Several days after the election, Obama met with his economic team for a full briefing and the calamities that, absent bold action, might lie ahead. After pondering the nightmare scenario, Obama asked his advisers if perhaps it wasn’t too late to ask for a recount of the election returns.
The economic crisis is both immediate and long-term. When Admiral Mike Mullen, the chairman of the Joint Chiefs of Staff, came to Brookings in May he was asked: “What problem, above all others, keeps you awake at night, Mr. Chairman?” Without a moment’s hesitation, he astonished us with a curt answer. The No. 1 threat to the country, he said, is the national debt, on a trajectory to exceed the US gross domestic product within 15 years.
On top of all these daunting challenges, Obama had focused, from the beginning of his campaign back in 2007, on two existential ones: the unravelling of the nuclear non-proliferation regime and climate change. On several occasions he referred to these threats jointly as the reason why the Earth is “a planet in peril.”
Put all this together, and it’s a defensible proposition that none of Obama’s 43 predecessors came into office facing a welter of global problems of this urgency, complexity and consequence. To be sure, his hero Abraham Lincoln had a full plate waiting in the White House in 1861, but it was essentially one plate, taking up the entire table. And while the nation was in mortal peril, the planet did not yet so qualify.
Obama’s theory of the case for American foreign policy starts from the premise that there has been a profound transformation in the nature, distribution and interaction of power. For the first time in history, the major states are at peace with one another. Moreover, to an unprecedented degree, they are collaborating in the search for ways to translate common interests into collective action, and to concert their resources and coordinate their policies in dealing with threats that they cannot manage on their own.
Those threats tend to come from weak or failed states, not strong ones. Or they come from non-state actors – international NGOs of the most malignant sort, Al Qaeda being the most notorious example but by no means the only one. Or they come from potentially disastrous natural consequences of human activity.
Taken together, these defining characteristics of our age require more emphasis and more effective reliance on diplomacy, partnerships, alliances, coalitions of the willing, and international norms and institutions. Back in the early 1980s, when Obama was in his 20s, he worked as a community organiser in Chicago. On several occasions during his campaign he cited that experience at a local level as teaching lessons that are applicable globally to the cause of better organising the community of nations in an increasingly interdependent world.
In short, he believes in improving the practices and mechanisms of global governance. We’ve not heard Obama use that phrase, nor is he likely to use it, since to many Americans it has connotations of world government and black helicopters. He speaks instead about “strengthening our common security by investing in our common humanity.”
But for Obama – and the US – to catalyse international cooperation, there must be a degree of domestic political cooperation between the Republicans and Democrats and between the executive and legislative branches of government.
The single most consequential drama playing out in Washington right now – with implications for the entire world – is the effort on the part of the administration and some members of the Senate, including, to their credit, a few Republicans, to pass a bill that takes the first step toward putting a price on carbon as well as establishing national targets and a basis for emission-trading.
Unless the US finally commits itself to federally legislated mandates for greenhouse gas reductions, it’s hard to imagine the international effort getting traction of any kind on that issue and certainly in anything like the time frame necessary to bend those two closely linked curves of greenhouse gas emissions and global warming.
A similar fight is brewing in the US Congress on nuclear proliferation, and the stakes are comparably high. The new strategic arms treaty that Obama has signed with President Dmitry Medvedev would be the first such pact ratified under a Democratic president. Yet in part for exactly that reason – to keep Obama from, as they say in Washington, “putting points on the board” – a number of Republican senators are trying to slow the treaty down if not stop it. Even if the US Senate ratifies the treaty, the current debate over it may have served its opponents’ purposes by laying the ground for a full, fierce assault against the administration’s determination to ratify the Comprehensive Test Ban Treaty, which the Senate rejected 11 years ago. A second defeat would severely damage the prospects for stopping the spread of nuclear weapons.
These two issues pose a test not just for the US government, not just for American democracy – but a test of the idea and institution of democratic governance itself. What a cruel, even fatal irony it would be if this system and philosophy of governance that we’re so proud of – democracy – were to empower the tyranny of short-term and short-sighted expedients over long-term imperatives relating to the survival of the human enterprise.
Obama pushes for legislative progress on climate and non-proliferation in the face of daunting opposition. He did not have to go for a climate-and-energy bill this year. In fact, he had a lot of advice not to do so. But he’s done it for a simple reason: Rather than letting the political calendar dictate lawmaking and policymaking, he is heeding the countdown on how little time we have to get serious about global warming before it’s too late. In other words, Obama has, consciously and necessarily, put the promise of his presidency at risk in order to have any chance of ameliorating the far greater risk to our planet, to our ecosphere and to our progeny.
Whatever fate is in store for the current president of the United States, one thing is certain. His success in tackling the major issues of our time depends on his establishing a degree of common purpose with his partners in national governance at the other end of Pennsylvania Avenue and with his partners in global governance around the world.— GN
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Tough choices for Britain |
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Richard Dannatt
AT first glance, last week was a confusing one for watchers of the defence debate. On the one hand, Afghan President Hamid Karzai announced at a major conference in Kabul that Afghan forces will take lead responsibility for security in that country by 2014, a plan supported by the British foreign secretary. On the other hand, the British prime minister seemed to suggest that the UK’s armed forces could begin to withdraw as early as next year.
At the same time, the National Audit Office (NAO) published a report that in effect ordered the Ministry of Defence (MoD) to live within its means, and reduce its planned expenditure over the next 10 years by about $53.35 billion (Dh195.9 billion) in order to do so. Some commentators translated this as, among other things, requiring the Army to lose up to 30,000 of its soldiers. Defence Secretary Liam Fox agreed that his department’s current programme was “entirely unaffordable”, and floated the idea of cutting the number of senior officers.
How does one make sense of that variety of messages? Well, on Afghanistan, Karzai and William Hague were setting out a plan that, if successful, would see the Afghans essentially running their own country in four years’ time. The challenge for the international community, and in particular Nato, is to ensure that the build-up of the Afghan forces, in terms of their quality and quantity, is such that this objective can be achieved.
Concentrating minds
If nothing else, the setting of a deadline will concentrate political and military minds, not only in Kabul, but in Washington, London, Brussels and elsewhere. Should the process go better than many predict, then the withdrawal of some British troops could indeed happen as soon as next year, as suggested by the prime minister. However, should the security transfer take longer, then the objective of handing over responsibility by 2014 would be called into doubt. Although a timeline has been set, this does not replace the over-riding principle that matters will ultimately be governed by conditions on the ground. So a sufficiently secure Afghanistan remains the objective; handover to the Afghans by 2014 is the aspiration. It is at this point that the NAO report becomes important — because the underfunding of British operations in Iraq and Afghanistan has been simply the most visible symptom of the MoD’s chronic budget difficulties, and chronic overspending. There were two solutions available: to increase central government funding for current military operations, and for the MoD to reorder its priorities.
Neither has really happened to the degree necessary. In terms of current operations, the Treasury fought the MoD every step of the way, paying what it had to, but on a grudging, minimalist basis. The MoD, for its part, has consistently failed to carry out the necessary re-prioritisation. In particular, although the department officially stated in October 2006 that its highest priority was the achievement of strategic success in Iraq and Afghanistan, its largest spending programmes remained those devoted to other wars that we may or may not find ourselves fighting in the future.
Core spending on Land Forces, which includes the Royal Marines, the Army, and the helicopter and transport parts of the Royal Air Force — the units that were doing the heavy lifting in Iraq and Afghanistan — saw only a minimal uplift. Why else would there have been continuing shortages of helicopters, surveillance equipment to combat the threat of improvised explosive devices, and sufficient numbers of well-protected vehicles, to name but three deficiencies? The NAO was absolutely right to order the MoD to live within its means. That, however, will mean brave decisions and bold cuts, and not just to the number of senior officers.
Taking a gamble
Those who wish to avoid those big equipment decisions would rather seize on the possibility of early withdrawal from Afghanistan in order to make cuts to British Land Forces, and hope that future wars look less like Iraq or Afghanistan, and more like the kind that justify the new, high-tech equipment that has sat so expensively in the Defence Programme for years, in some cases stretching back to the Cold War.—Telegraph
This brings the whole discussion back to the importance of the current Strategic Defence Review. Unless it is underpinned by a proper analysis of the character and nature of future conflict, in order to determine the likely threats to the security of Britain, then future policy will be based upon those cherished equipment programmes, propped up by vested interests but devoid of logical rationale. No one knows what the future will look like, but we certainly know what Afghanistan looks like, and we know we need to get that right. Britain may be able to start withdrawing troops from Afghanistan next year, and be out completely by 2014, but what if it cannot do that? And what if the next war looks similar to Afghanistan, and needs boots on the ground rather than fast jets, tanks, heavy artillery and submarines?
The present and the future of British security and defence needs are all bound up in this review. To fudge the issue on grounds of expediency, rather than basing policy on rational analysis, will simply perpetuate the muddle that has characterised the decade since 9/11. The Coalition has the opportunity to bring clarity and direction. Is it willing to rise to the challenge? Telegraph
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Avoiding another meltdown |
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Robert J. Shiller
CENTRAL bankers around the world failed to see the current financial crisis coming before its beginnings in 2007. Martin Èihák of the International Monetary Fund reported in July 2007 that, of 47 central banks found to publish financial stability reports (FSRs), “virtually all” gave a “positive overall assessment of their domestic financial system” in their most recent reports.
And yet, although these central banks failed us before the crisis, they should still play the lead role in preventing the next crisis. That is the conclusion, perhaps counterintuitive, that the Squam Lake Group, a think tank of 15 academic financial economists to which I belong, reached in our recently published report, Fixing the Financial System.
Macro-prudential regulators (government officials who focus not on the soundness of individual financial institutions, but rather on the stability of the whole financial system) are sorely needed, and central bankers are the logical people to fill this role. Other regulators did no better in predicting this crisis, and are even less suited to prevent the next.
David Cameron’s new government in the United Kingdom apparently came to the same conclusion when it announced plans to transfer regulatory authority from the Financial Services Authority (FSA) to the Bank of England.
But agreement about the regulatory role of central banks is not widely spread. In the United States, for example, there is recognition of the importance of macro-prudential regulation, but not of giving this authority to the Federal Reserve. The newly passed US financial-reform legislation entrusts macro-prudential policy to a new Financial Stability Oversight Council. That is good, but the US Treasury secretary will be the council’s chairman, and the Fed, despite gaining some new powers, will for the most part be only one of many members.
The head of the council is thus a political appointee who serves at the pleasure of the president. Recent history shows that political appointees often fail to take courageous or unpopular steps to stabilise the economy. A modern US president certainly remembers how difficult it was to convince voters to put him where he is, and is perpetually campaigning to maintain approval ratings and to preserve his party’s prospects in the next election. The Treasury secretary is part of the president’s team, and works next door to the White House. George W. Bush won the 2000 election, despite losing the popular vote. In 2003, Bush chose as his Treasury secretary John W. Snow, a railroad president who, as Barron’s columnist Alan Abelson put it, “may not be the sharpest knife in the cabinet.” Snow obliged the president and gave unquestioning support to his policies until leaving office in 2006, just before the crisis erupted. Under the new law, Snow would have been in charge of the stability of the entire US economy.
One theme that Bush found resonated with voters in his 2004 re-election campaign was that of the “ownership society.” A successful economy, Bush argued, requires that people learn to take responsibility for their actions, and policies aimed at boosting home ownership would inculcate this virtue on a broader scale. That sounded right to voters, especially if it meant government policies that encouraged the emerging real-estate bubble and made their investments in homes soar in value.
Snow echoed his boss. “The American economy is coiled like a spring and ready to go,” he chirped in 2003. Two years later, near the very height of the bubbles in the equity and housing markets, he declared that, “We can be pleased that the economy is on a good and sustainable path.”
But, to Bush’s credit, he also brought in Ben Bernanke in 2006 as Fed Chairman. Not part of Bush’s team, Bernanke was protected from political pressures by America’s long tradition of respect for the Fed’s independence. The choice of Bernanke, an accomplished scholar, apparently reflected Bush’s acceptance of the public’s expectation of a first-rate appointee.
The same problems occur in many other countries. People who are chosen in part to win the next election often find their economic judgment constrained. A news story in 2003 reported, for example, that Australian Secretary to the Treasury Ken Henry had warned of a “housing bubble” there, but then quickly tried to withdraw his comment, saying that it was “not for quotation outside of this room.” He did earlier this year finally propose new tax policy to slow the still-continuing Australian housing bubble, but now he can’t get his government to implement it. —KT
By contrast, in recent decades central bankers in many countries have gradually won acceptance for the principle of independence from day-to-day political pressures. The public in much of the world now understands that central bankers will be allowed to do their work without interference from politicians. There is a tradition of the central banker as a worldly philosopher, who stands up for long-term sensible policy, and this tradition makes it politically easier for central bankers to do the right thing.
In fact, while the world’s central banks did not see the current crisis coming and did not take steps before 2007 to relieve the pressures that led to it, they did react decisively and energetically as the crisis unfolded, with coordinated international action. This was facilitated by the tradition of political independence and cooperation that has developed over the years among central bankers.
The crisis has underscored the utmost importance of macro-prudential regulation. Although our central bankers are not perfect judges of financial stability, they are still the people who are in the best political and institutional position to ensure it.
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