You Can't Handle the Truth!

By Cernig

The truth is that taxes will have to rise and American foreign policy adventures abroad will have to be severely curtailled. But, so far at least, neither the current administration nor the two Presidential candidates feel you're able to handle being told that. (Or, to be precise, they don't think you'd vote for them if they told you the truth.) That might change in tonight's debate but somehow I doubt it.

In the latest Newsweek magazine the apostate neocon theorist Francis Fukayama writes in an essay dramatically entitled "The fall Of America Inc.":

Ideas are one of our most important exports, and two fundamentally American ideas have dominated global thinking since the early 1980s, when Ronald Reagan was elected president. The first was a certain vision of capitalism—one that argued low taxes, light regulation and a pared-back government would be the engine for economic growth. Reaganism reversed a century-long trend toward ever-larger government. Deregulation became the order of the day not just in the United States but around the world.

The second big idea was America as a promoter of liberal democracy around the world, which was seen as the best path to a more prosperous and open international order. America's power and influence rested not just on our tanks and dollars, but on the fact that most people found the American form of self-government attractive and wanted to reshape their societies along the same lines—what political scientist Joseph Nye has labeled our "soft power."

It's hard to fathom just how badly these signature features of the American brand have been discredited.

Fukayama points to the twin failures of American hard power to bring rose-colored liberation to the Middle East and to the American ideal of the de-regulated, rapaciously free market to bring showers of sweet-smelling dollars to all as the reasons for that discrediting.

Between 2002 and 2007, while the world was enjoying an unprecedented period of growth, it was easy to ignore those European socialists and Latin American populists who denounced the U.S. economic model as "cowboy capitalism." But now the engine of that growth, the American economy, has gone off the rails and threatens to drag the rest of the world down with it. Worse, the culprit is the American model itself: under the mantra of less government, Washington failed to adequately regulate the financial sector and allowed it to do tremendous harm to the rest of the society.

Democracy was tarnished even earlier. Once Saddam was proved not to have WMD, the Bush administration sought to justify the Iraq War by linking it to a broader "freedom agenda"; suddenly the promotion of democracy was a chief weapon in the war against terrorism. To many people around the world, America's rhetoric about democracy sounds a lot like an excuse for furthering U.S. hegemony.

...The problem now is that by using democracy to justify the Iraq War, the Bush administration suggested to many that "democracy" was a code word for military intervention and regime change. (The chaos that ensued in Iraq didn't exactly help democracy's image either.) The Middle East in particular is a minefield for any U.S. administration, since America supports nondemocratic allies like the Saudis, and refuses to work with groups like Hamas and Hizbullah that came to power through elections. We don't have much credibility when we champion a "freedom agenda."

The American model has also been seriously tarnished by the Bush administration's use of torture. After 9/11 Americans proved distressingly ready to give up constitutional protections for the sake of security. Guantánamo Bay and the hooded prisoner at Abu Ghraib have since replaced the Statue of Liberty as symbols of America in the eyes of many non-Americans.

No matter who wins the presidency a month from now, the shift into a new cycle of American and world politics will have begun.

Fukuyama, the professor of International Political Economy at the Johns Hopkins School of Advanced International Studies, goes on to look at ways to rescue the mess that's been made, a mess that signals for him an end to the "Reagan Era" of deregulation and foreign interventionism. The remedies include rebuilding the public sectors ability to create jobs (while watching for overcompensation), regulation of finance in full knowledge of how this industry differs from real industries that make real products, and a repudiation of the Bush Doctrine as well as it's attendant hypocrisies about civil rights, torture, democracy and aggressive despots. In other words, although he doesn't say so, a vote against John McCain.

Even so, it's going to take decades for the U.S. to recover and it will never be quite the same again. Fukuyama agrees that the forseeable world is a multipolar one - the neocon dream of American perpetual hegemony is as dead as the dinosaurs.

My colleague Fester said much the same thing in a recent post - far shorter and more succinct than Fukuyama's essay but then again he's never been a neocon Godfather and so doesn't have to carefully construct a "get out of Hell free" card as he writes.

We are entering a world where we are not the center of it any more. There are other actors with agency and leading roles in that world. This adjustment will be easier if we as a society and, more importantly, if the political leadership recognizes that times have changed and the fantasy that has dominated our discourse that we can act with only minimal constraints (internal or external) has ended so that the core debate is on the means instead of ends of policies.

We’re not ready for that conversation despite it rapidly approaching us as the numbers won’t add up without significant foreign financing with strings attached to it. And this will be the core foreign policy problem that neither campaign is willing or able to address.  The American freedom to maneuver, to create coalitions through various forms of power, incentives, threats, and appeals, has been and will continue to be curtailed.  We will not see the US Navy laid up at its docks like the Soviet Red Banner Fleet was in 1991, but our ability to support current trends in foreign policy will be sharply curtailed by our economic crisis.

The US is, as Fester puts it "broke and overpromised". Someone has to pay for the $700 billion bailout, the deficit spending on Iraq and Afghanistan that eats up a similiar amount and the untold billions still to come in navigating a financial crisis in which no-one yet can see the bottom. Some will come from foreign financing "with strings" and that will curtail America's foreign policy options. The rest will come from taxes and spending cuts - and the current levels of both are nowhere near enough to keep America Inc. out of the red. Taxes will rise and spending will drop. There's no other way except bankruptcy.

Here's how your taxes got spent last year:

The simple truth is that the Pentagon's budget is equivalent to a Paulson a year, and as much as the whole of the rest of the world spends on defense. Surely it's about time someone asked if America couldn't get by on a defense budget, say, equivalent to its three largest rivals. Those are France, the UK and Japan - what you expected China, Iran and Russia?

Cutting the defense budget to even this high level - where the US outspends its main rivals by three to one - would bring it down to around $300 billion a year. That's $400 billion a year you and your grandchildren don't have to find to claw America Inc. back into the black.

But as both Fukuyama and Fester agree, the US will have to get used to a draw, instead of the win it has awarded itself until now, in the war of ideas. Both spreading democracy at gunpoint and financial laissez fair have proven as untenable as fully controlled communist-style economies and the spread of communism at gunpoint. Along the way they've tarnished America and with it the best idea America had to offer - free opportunity within a framework of social co-operation and negotiation. Somewhere in the middle appears to lie a stable path and that path doesn't include a US that bestrides the world like a colossus. You might not like that, or you might. It makes no difference whether or not you can handle the truth.

(More on the same theme from Eric Martin at Obsidian Wings and from Martin at Boztopia.)

Comments

[Russ Wellen]

What got the UK to accept its status as a second-rate power? Being on the victorious side in two world wars by the skin of its teeth? India throwing off its shackles?

I'm weak on history, but I'd imagine one or all of events similar to those would have to happen to humble Americans.

[Steve Hynd]

Hi Russ,

What got the UK to accept its status as a second-rate power?

Amassive recession. Heh.

Regards, C