Ruminations, January 20, 2013
Is Obama’s foreign policy a significant turning point?
Maybe so and maybe for the better. While there has been criticism of his short term positions in Libya and Syria, some of it justified, his long-term objectives may be a turning point for U.S. policy and he may be on the right track.
To put things in perspective we need to go back -- not to the Bush, Clinton or Reagan Administrations -- but to the administrations of Franklin Roosevelt and Harry Truman.
Post WWII history. In 1944, it became apparent that there would be two powers emerging from World War II: The United States and the Soviet Union. It also became apparent that the Soviet Union was intent on re-establishing its goal of world communism and surrounding its territory with friendly (i.e., puppet) states. Germany (both East and West), the Soviets thought, would eventually fall within the communist sphere, especially since the capital Berlin lay in the center of East Germany. France had been ruled in the late 1930s by a popular-front coalition that was supported by the Soviets and the Communist party had a membership of between 500,000 and 600,000 in the post-war years. In Italy, the Communist party played a significant role after the war.
The United States, to counter this, established the Marshall Plan and NATO were by. The economic situation was such that the Marshall Plan lifted the European war-torn countries from poverty and through North Atlantic Treaty Organization (NATO) we were able to keep the Soviet Red Army in check. Given that Western Europe did not have the resources to compete militarily with the Red Army, the United States provided the great majority of the men and materiel support.
Current history. The Marshall Plan ended, but Western Europe continued to rely on the United States for military support. One reason that our NATO allies can afford many social programs is that they continue live under the protection of the American defense umbrella and they don’t pay for it – we do.
And so NATO stayed and the United States continued to set the direction and provide most of the resources. This was OK with the U.S., because it assured NATO support for its policies and it was OK with the other NATO members because they got security at little cost. Throughout the Cold War, this status stood all parties relatively well, especially since NATO never engaged its enemies.
After the Cold War’s conclusion, NATO expanded (28 member nations today) and took on some tasks that were outside the scope of the original charter. They expanded to include new members of the former communist bloc and military operations in the Balkans and Middle East.
To put defense in a more equitable position, NATO established fiscal defense benchmarks -- each nation is to spend at least 2 percent of its gross national product (GNP) on defense. (The United States spends almost 5 percent of its GNP on defense.) As with European Union (EU) fiscal benchmarks, most European nations (except four) felt safe in ignoring the benchmarks, since there were no penalties and the United States wasn’t about to abandon them.
Currently, with an economic crisis at hand and popular opinion polls questioning their commitment to the NATO effort in Afghanistan, EU members are looking for expenditure cuts. This is especially true because their learned behavior follows the lines of: Let the U.S. spend the resources since our commitment is insignificant anyway.
But there are true believers in the NATO commitment. In an interview with The London Times, NATO Secretary-General Anders Fogh Rasmussen warned members, “All governments should be aware of the long-term impact of too deep cuts in defense budgets because we know from experience that economic growth is very much dependent on a secure international environment.”
Obama’s conundrum. It does wonders for the national ego to know that United States is the policeman for the world and everyone can depend on us. In times of a fiscal crisis, however, we become aware that being policeman is also very expensive.
In the recent past, President George W. Bush as well as President Obama, have tried to put pressure on Western European governments to contribute their fair share – with little success. Even help from the head of the Research Division at the NATO Defense College, Dr. Karl-Heinz Kamp was to no avail. Kamp said: “Europe has about two million men under arms but only 3 to 5 percent of them are deployable in combat. This is an incredible mismatch.”
What’s Obama to do? As Europe steps back from Afghanistan, Obama is doing the same. Although one could surmise that Europe is basing its actions on Obama’s lead, European leaders have been under tremendous domestic pressure to pull out of Afghanistan. If Obama had chosen a significant troop presence he and the United States would be (mostly) on their own.
And we have left Iraq.
And in Libya, Obama chose to “lead from behind,” supporting the French and the British.
In Syria, Obama has chosen a minimal involvement and letting Europe take the lead.
In Mali, Secretary of Defense, Leon Panetta is offering the French encouragement and little else.
Without the United States’ involvement, there is a power vacuum. Will Europe step up? Maybe. In Mali it seems they are.
What is Obama doing? Instead of importuning Europe to step up their military roles, he has stepped back, giving them the opportunity for them to step up. Will they? So far, it looks promising.
Risks. Are there risks in this strategy? Of course; every silver lining has a cloud.
Without the United States to act as a world enforcer, situations can develop over which we have no control. Even if the United States were to retain a role as enforcer of last resort, by the time we acted it might be too late. For example, withdrawal from Afghanistan could lead to a situation similar to what existed in 2001 with al Qaeda safely ensconced in Afghanistan and directing actions around the world.
Iraq could fall into a sectarian civil war.
Europe may decide to forego a stronger military presence, whereupon a situation may develop wherein unfriendlies control critical situations to our detriment.
There is also the possibility (albeit a long shot at this point) that an unfriendly nation could develop a stronger military than the U.S. and begin to call the shots.
Whatever the risks, it seems to be the course that Obama has selected and as president, he sets foreign policy.
Bernanke picks a side
Ostensibly, the chairman of the Federal Reserve is politically neutral. To ensure this position, presidents often reappoint chairmen even when the chairman is from an opposing party (e.g., Paul Volcker, a Democrat, was reappointed by Republican Ronald Reagan and Ben Bernanke, a Republican, was reappointed by Democrat Barack Obama.)
Even when a chairman’s policies are largely complement the President’s policies, there still needs to be some daylight between the two in order to avoid the stigma of short-term political objectives and the charge of a political monetary policy.
In the political fight over raising the debt limit, last week, Fed Chairman Ben Bernanke picked a side: President Obama’s.
Speaking at the University of Michigan on Monday Bernanke issued a warning to congressional Republicans: "Raising the debt ceiling, which Congress has to do periodically, gives the government the ability to pay its existing bills -- it doesn't create new deficits, it doesn't create new spending," He went on to say, "Not raising the debt ceiling is sort of like a family, which is trying to improve its credit rating, saying, 'Oh, I know how we can save money -- we won't pay our credit card bills.'"
What Bernanke said has merit and fits right in with Obama’s line of reasoning. But couldn’t he have said, and been equally as correct: “Raising the debt ceiling without cutting spending is sort of like a family, which is trying to improve its credit rating, saying, 'Oh, I know how we can save money – we’ll ask for an increase on our credit card limits?.'"
An argument can be made for either position and the arguments are political. When the Fed Chairman chooses a political side he ceases to be neutral and deserves opprobrium from any political operatives.
Quote without comment
Economist Donald L. Kohn, former Federal Reserve Vice Chairman, testifying before Congress, July 9, 2009: “The insulation from short-term political pressures--within a framework of legislated objectives and accountability and transparency--that the Congress has established for the Federal Reserve has come to be widely emulated around the world. Considerable experience shows that this type of approach tends to yield a monetary policy that best promotes economic growth and price stability.”