Sunday, July 13, 2008
Liberals Should Calm Down About The New Surveillance Statute
First, let me reiterate my strong objection to the illegal program of warrantless surveillance that the Bush Administration conducted. However, let me also emphasize that the basis for my objection was that Bush’s program clearly violated FISA – a felony violation under the statute – and circumvented the scrutiny of the FISA court. This was an abuse of Executive power, violating the separation of powers mandated by the constitution. In addition, by conducting surveillance outside of the scrutiny of any court, Bush pursued a program that was opaque and unaccountable. The simple fact is that even today, no one outside of the Bush Administration itself knows exactly what sort of surveillance was conducted. For all we know, the surveillance could have targeted Bush’s political opponents. It was precisely such abuses that the FISA statute was designed to prevent, by creating a specialized, highly-secret “FISA court” that would review and authorize foreign intelligence electronic surveillance, so as to prevent Presidents from conducting abusive, politically-oriented electronic surveillance under the purported rubric of “national security.” In my earlier posting, however, I was also careful to point out that if there were any deficiencies in the existing FISA statute that impeded the legitimate needs of the government to conduct the fullest possible surveillance of terrorist organizations such as Al Qaeda, then the appropriate remedy would be to ask Congress to amend the statute; the remedy would not be simply to ignore the statute altogether, as Bush did.
The new statute is an attempt by Congress to fix perceived weaknesses in the old FISA statute. Many objections to the old statute may well be legitimate. In attempting to address these problems, the new statute does not abandon the requirement of FISA court review and authorization. The new statute is by no means an affirmation of what the Bush Administration did; if anything, it is a repudiation of Bush’s actions, by making it clear that legitimate foreign intelligence surveillance can be conducted consistent with the law and under the scrutiny of the FISA court, so as to prevent abuses of Presidential power.
In my opinion, there is absolutely nothing on the face of the new FISA statute that in any way violates the Fourth Amendment’s ban on unreasonable searches and seizures. To be sure, there are some debatable technical aspects of the new law, as I discuss below, and it will take some time to see how the law works in practice, in order to determine whether or not it succeeds in striking a proper balance between protecting legitimate privacy interests and enabling the government to gather intelligence about terrorist organizations to the fullest possible extent. On its face, however, the new statute appears to be a reasonable attempt to reconcile these interests in a manner fully consistent with the requirements of the Fourth Amendment.
I cannot emphasize this point too strongly. The hyperbole that has been circulated about the new FISA statute is astounding. The ACLU has recently announced that it is filing a lawsuit to challenge the new statute, claiming that the new law is “un-American” and sounds the virtual death knell of the Bill of Rights (and parenthetically, also provides a good opportunity for the ACLU to solicit donations). On a recent television program, law professor Jonathan Turley described the statute as marking the end of the Fourth Amendment, claiming that the statute would permit Presidents to conduct warrantless surveillance of all Americans’ communications without any limitations. Even a cursory reading of the statute reveals that Turley’s statements are utter poppycock. (To make an ad hominem aside, Turley strikes me as the new Alan Dershowitz, a publicity-seeking self-promoter and not a serious legal scholar; I note that Turley, now the darling of the civil libertarian left, originally became known as a TV pundit because of his vigorous support of the Republicans’ impeachment of Bill Clinton, something that in my view, was little more than an attempted coup d’etat).
There are two principal aspects of the new FISA statute on which public attention has concentrated. First, it expands the jurisdiction of the FISA court to approve foreign intelligence surveillance in a broader range of circumstances than is permissible under prior law. It is simply untrue, however, that the new statute would authorize blanket warrantless surveillance of all Americans’ communications. In my judgment, these modifications to the FISA statute are reasonable and fully consistent with the Fourth Amendment, as discussed below.
Second, the new statute grants a form of civil immunity to telecommunications companies that assisted the Bush Administration in conducting surveillance without authorization of the FISA court during the period between September 11, 2001 and January 2007 (by way of shorthand, I refer to this issue as that of "telcom immunity"). This provision is more problematic, although again, I do not see that it raises any constitutional issues. I do agree with Senator Obama that this provision should have either been deleted or delayed, since the new statute also contains a provision requiring various federal Inspectors General to report to Congress as to what exactly the Bush Administration did, and it would have been preferable for the immunity not to take effect until after Congress knows exactly what it is immunizing. The Bush Administration, supported by all Senatorial Republicans (except Senator Specter) and a handful of Democrats (not including Senator Obama), was adamant in opposing these modifications to the immunity provisions. Given a choice between a FISA statute that included a flawed immunity provision, and no FISA statute at all, I believe that Senator Obama made the correct choice in voting for the new statute. By “correct” I mean not just that it was politically smart, although it clearly was, but that it was also in the best interests of the country.
Background of FISA
In order to understand my support for the new FISA statute, it is helpful to understand the history and evolution of Fourth Amendment law as it applies to the subject of foreign intelligence surveillance. The old FISA statute was enacted in 1978 in response to the Supreme Court’s decision in United States v. United States District Court, 407 U.S. 297 (1972) (generally known as the “Keith case”), which held that President Nixon did not have the power under the Fourth Amendment to order warrantless electronic surveillance in cases involving “domestic security.” The Supreme Court left open the possibility that a more relaxed standard would apply under the Fourth Amendment in cases involving foreign intelligence where the activities of foreign powers and their agents are under scrutiny.
FISA was enacted to provide a legal framework for electronic surveillance in the foreign intelligence arena in light of the Supreme Court's ruling in the Keith case. There were certain fundamental concepts at the heart of the original FISA statute. First, the statute provided that foreign intelligence surveillance may be conducted without a court order only if the Attorney General certifies that there is no reasonable likelihood that the communications of a U.S. person (a citizen or resident alien) will be intercepted. Second, if the Attorney General could not make such a certification, then foreign intelligence surveillance could only be conducted pursuant to an order issued by a specialized, highly secretive FISA court based upon a showing that the target of the surveillance was a foreign power or an agent of a foreign power (the post 9/11 Patriot Act redefined the term "foreign power" to include terrorist organizations). Third, the Attorney General would have to develop “minimization” procedures (I discuss the concept of minimization in more detail below) to ensure that the surveillance only served the purpose of gathering foreign intelligence information and did not unreasonably invade the privacy of communications unrelated to foreign intelligence; these minimization procedures would have to be reviewed and approved by the FISA court to ensure their compliance with the Fourth Amendment.
The impetus for the new FISA statute emanated from the contention that the limitation of the FISA court’s jurisdiction to surveillance of foreign powers and their agents rendered the statute ineffective as a tool for gathering intelligence about terrorist organizations such as Al Qaeda. After all, organizations such as Al Qaeda do not publish membership directories, and it may not be possible to identify specific individuals as being “agents” of these organizations. Because of the inability of intelligence agencies to target specific individuals as agents of a foreign power, it is quite likely that intelligence agencies would be barred by the old FISA statute from conducting electronic surveillance that would undoubtedly yield a good deal of valuable intelligence about the activities of terrorist organizations.
It was here that the Bush Administration chose to embark upon a course of action that was both grossly unconstitutional and monumentally stupid. Instead of asking Congress to amend the statute in order to expand the jurisdiction of the FISA court so that any deficiencies in FISA could be cured in a manner consistent with the rule of law, Bush chose to act as though FISA did not even exist and authorized the conduct of rampant warrantless surveillance that completely bypassed the authority of the FISA court. Bush’s lawless course of conduct went on for approximately five and a half years. Finally, new legislation was proposed to deal with the shortcomings of the old FISA statute, which culminated in the recently-enacted statute that has caused so much controversy. As an ultimate display of Executive chutzpah, Bush commented that the new statute was “long overdue”; of course, the only reason it took so long was because of the numerous complications arising from the fact that Bush had chosen to don his familiar cowboy hat and ignore Congress and the FISA court in conducting warrantless surveillance, thereby giving rise to the complex issue of telcom immunity that has been the major sticking point in the enactment of the new statute.
The new FISA statute deals with the shortcomings of the old law by eliminating the limitation of the old statute of FISA court jurisdiction to the surveillance of foreign powers and their agents. Instead, the new statute authorizes the FISA court to enter an order permitting the surveillance of the communications of any non U.S. person, so long as there is probable cause to believe that the non U.S. person is located outside of the U.S. Communications of U.S. persons can be targeted for interception only if there is probable cause to believe that the U.S. person is both located outside of the U.S. and is acting as the agent of a foreign power. In this context, the new statute expressly prohibits "reverse targeting", i.e., the targeting of a non U.S. person as a pretext for conducting surveillance of a U.S. person. Most importantly, the new statute continues the requirement of “minimization” and empowers the FISA court to review the minimization procedures in order to ensure compliance with the Fourth Amendment (I’ll discuss the crucial aspects of minimization below).
Constitutionality of the New FISA Statute
The new statute clearly is going to generate a good deal more surveillance than was possible under prior law. This will likely be of benefit to intelligence agencies, although I actually have some concern that the new law will generate too much data and will prove to be of little practical use. However, the real question is whether the law is constitutional under the Fourth Amendment. I have very little doubt that it is.
It is very important keep in mind that the new statute applies to the interception of communications occurring, at least in part, outside of the U.S. The Fourth Amendment has little or no extraterritorial application. Since the beginnings of the Republic, courts have recognized that the Fourth Amendment permits warrantless “border searches” in order to control the flow of goods and people into the country. Air travelers must submit to warrantless searches, without probable cause, as a requirement for air travel. For similar reasons, the Fourth Amendment places little limitation on the government’s power to intercept telecommunications occurring outside of the U.S.
There are two main reasons why the Fourth Amendment has little or no extraterritorial reach. First, activities occurring outside of the country raise issues of national security, not just domestic security, and as the Supreme Court emphasized in the Keith case, Fourth Amendment considerations in measuring the “reasonableness” of a governmental search in these two contexts are quite different.
The second reason for the territorial limitations on the reach of the Fourth Amendment stems from the nature of the Fourth Amendment’s protections. As the Supreme Court emphasized in Katz v. United States, 389 U.S. 347 (1967), the first Supreme Court decision to hold that the Fourth Amendment applies to electronic surveillance and not just physical searches and seizures, the Fourth Amendment protects “reasonable expectations of privacy.” When one makes a telecommunication outside of the U.S., one really cannot have any reasonable expectation that the communication is private. Can anyone seriously say that when one places phone calls to countries such as Egypt, Uzbekistan, or China, one does not expect that local government authorities are monitoring the calls? Indeed, very few countries in the world place restrictions on their government’s ability to conduct surveillance comparable to those imposed on the U.S. government by the Fourth Amendment. Thus, it makes no sense to construe the Fourth Amendment as limiting the power of the U.S. government to intercept extraterritorial telecommunications, when those communications are not really “private” in any reasonable sense.
The real key to the workings of the FISA statute, and the element that renders the statute constitutional, in both its old and new versions, is the requirement of minimization. Although the new statute only permits the targeting of non U.S. persons outside of the U.S. (and U.S. persons acting as foreign agents), it is inevitable that this surveillance is going to pick up the communications of many U.S. persons who may be on the receiving or sending end of the communications being intercepted. Does this fact render the new statute unconstitutional? The answer is, not necessarily, and this is why the requirement of minimization is crucial.
The problem of minimization is inherent in all electronic surveillance, not just surveillance conducted under the old and new FISA statutes. To draw an illustration from popular culture, government agents may have probable cause to believe that Tony Soprano is a nefarious criminal who discusses all sorts of criminal activity on his home phone. As such, the government can obtain a court order to tap Soprano’s phone. However, Carmela, Meadow, and A.J. may also use that phone to talk to friends and family to discuss their personal lives and all sorts of things having nothing to do with Soprano’s criminal activities; Tony himself may also conduct perfectly legitimate conversations with persons uninvolved in criminal activities. So, how do you prevent the wiretap from becoming a wholesale, unconstitutional invasion of the reasonable privacy expectations of both the Soprano family and the non-criminal people who communicate with them? The answer is minimization. The law requires the government to follow minimization procedures, such as by limiting the hours when the surveillance will take place, or by targeting or eliminating certain incoming or outgoing phone numbers based on an analysis of which ones are most likely to be related to Tony’s criminal activities.
Similar minimization requirements apply under the old and new FISA statutes. In order to obtain a surveillance order from the FISA court, the government must certify that it has in place minimization procedures to ensure that the surveillance only captures communications relevant to the gathering of foreign intelligence. Again, the FISA statute specifically requires the FISA court to approve the minimization procedures in order to ensure that the surveillance complies with the Fourth Amendment. While intelligence agencies are understandably secretive about the minimization procedures they employ so as to avoid giving a road map to targets as to how to avoid surveillance, it is generally believed that the procedures employ “algorithms” such as word searches or formulas involving patterns of communications with individuals in specific countries in order to minimize the interception of communications unrelated to foreign intelligence.
It should be emphasized that it is actually in the interest of the intelligence agencies to have meaningful minimization procedures, not only for the protection of privacy rights, but also to make the surveillance productive from an intelligence-gathering perspective. As noted above, I do have some concern that the new law is overinclusive, and will result in the interception of so many irrelevant communications that the ones truly useful to intelligence gathering will be lost. Effective minimization is essential to being able to “separate the wheat from the chaff.”
It will take some time to see if FISA’s minimization rules – which are completely unchanged by the new statute – strike an appropriate balance between the need to gather foreign intelligence information and the protection of privacy. What is important, however, is the fact that this will be worked out under the supervision of the FISA court. And again, the statute specifically directs the FISA court to tailor the minimization rules in order to ensure compliance with the Fourth Amendment. The notion being promulgated by alarmist opponents of FISA that the new FISA statute empowers the Executive branch to engage in wholesale invasions of privacy, without any check by the Judiciary, is untrue.
Technical Problems With The New FISA Statute
Before turning to the issue of telcom immunity, I’d like to refer to three technical aspects of the new FISA statute that are potentially problematic, although they do not rise to the level of creating a constitutional issue. First, there is a provision empowering the Executive to engage in warrantless surveillance when “exigent circumstances” are present. The old FISA statute also contained such a provision, and it required that such warrantless interception in exigent circumstances would be permitted so long as the government made an application to the FISA court to approve the interception within seventy-two hours (three days) of beginning the interception. The new statute is essentially the same, except it extends the time period for the government’s application from three days to seven days. I personally do not see the need for this change, as it is difficult to foresee a situation in which a period of three days would be insufficient to submit an application to the FISA court. However, I also don’t see that the difference between three days and seven days raises a constitutional defect in the new statute. And looking at the big picture, I agree with Obama’s assessment that the public’s need for comprehensive foreign intelligence capabilities outweighs what seems to me to be a minor technical defect in the statute.
The second technical issue in the new statute concerns a provision that states that if the FISA court rejects the government’s application to conduct an interception, the government may continue conducting the interception while it pursues an appeal from the FISA court’s ruling. This in itself seems appropriate. If the appeals court were to overturn the FISA court and rule that the interception should have been authorized, then it would be, of necessity, too late to undo the FISA court’s mistake, as the opportunity to intercept the communications would have already been lost. All that the new FISA statute does is to impose an automatic stay of the FISA court’s ruling pending appeal; such stays are a well-accepted aspect of American jurisprudence, and there is hardly anything radical about this aspect of the new FISA statute.
A more troubling aspect of this provision states that if there is ultimately a ruling by the appellate court that the interception should not be authorized, then the government may nevertheless keep and use the communications it has intercepted to that point. Here, it seems clear to me that the Fourth Amendment would be violated if the government attempted to use the illegally-obtained interceptions in connection with a criminal prosecution, and the statute does explicitly prohibit the use of such evidence in any court proceedings. However, it is important to recall that the purpose of both the old and new FISA statutes is to enable the government to gather foreign intelligence, and not to pursue criminal prosecutions. In that context, I am much less troubled about the prospect of the government being able to use the information for intelligence purposes, notwithstanding any ultimate ruling by the courts on the validity of the government’s application.
The third technical problem concerns the provision in the new statute prohibiting "reverse targeting" of U.S. persons. Opponents of the statute contend that this provision lacks sufficient "teeth". I'm not sure that I understand this argument, as the new statute clearly empowers the FISA court to review "targeting procedures" so as to prevent the intentional acquisition of communications occurring wholly within the U.S.
The Problem of Telcom Immunity
As emphasized previously, the problem of telcom immunity arises only because the Bush Administration chose to ignore both the FISA statute and the constitutional principle of separation of powers by conducting warrantless surveillance, instead of asking Congress to amend the FISA statute. Numerous telecommunications companies acceded to the Bush Administration’s requests for assistance in this venture. The legal status of these companies is now at issue.
FISA includes a provision stating that any “person” who engages in a violation of FISA is, in addition to facing potential criminal liability, civilly liable to anyone whose communications were wrongfully intercepted. The amount of the liability is the greater of the plaintiff’s actual damages, or liquidated damages of $1,000 or $100 for each day of unlawful surveillance.
It should be noted that FISA states that any “person” may be held civilly liable; the statute does not authorize lawsuits against the government itself. Civil suits against the government are generally barred by the doctrine of “sovereign immunity”, unless there is a specific statute authorizing such a lawsuit, and as noted, there is no such authorization in FISA.
FISA suits may, however, be brought against individual government officials who participated in any surveillance in violation of FISA, potentially including Bush himself. Many such suits have in fact been filed. There is nothing in the new FISA statute that would change this, so the potential for suing Bush, Cheney, et al., still exists. Most such lawsuits have thus far been unsuccessful because of the plaintiff’s inability to prove “standing”, i.e., showing that the plaintiff was in fact the target of warrantless surveillance.
Numerous lawsuits have also been filed against telecommunications companies. Presumably, these lawsuits would face the same standing hurdle that has thus far doomed lawsuits filed against government officials. I therefore fail to understand the claim of FISA opponents such as the ACLU that telcom immunity is part of the Bush Administration's "cover-up", and that suits against telecommunications companies are the only way we can pursue this matter in the courts and get to the truth. If a plaintiff can prove standing, he or she can still sue responsible government officials, and if the plaintiff cannot prove standing, then a lawsuit against a telecommunication company will be no more viable than a lawsuit against a government official.
Assuming, however, that the standing obstacle could somehow be overcome, there is another issue that is raised by lawsuits against telecommunications companies, and that is what leads to the thorny issue of telcom immunity. As noted, you can’t sue the government for violating FISA because of the doctrine of sovereign immunity. There is a related legal doctrine known as “private contractor immunity” which holds that when a private party acts at the behest of the government in carrying out a governmental function, then the private party is also immune from suit by an extension of sovereign immunity. The private contractor immunity doctrine is quite controversial, and it is not clear-cut that that the doctrine would apply to a suit against a telecommunications company that participated in a violation of FISA. However, the concern of the telecommunications companies is that they would not even have an opportunity to raise the issue, and therefore could not get a fair hearing in a civil lawsuit.
The reason for this is the continuing secrecy that has cloaked the Bush Administration’s warrantless surveillance program. Indeed, to date, the Bush Administration has not even officially admitted that the program existed. Thus, the fear of the telecommunications companies is that if they raised the defense of private contractor immunity, the Bush Administration would refuse to provide any information in court that might show what the companies did and why they did it. The result could well be that the telecommunications would be denied the opportunity to raise the defense of private contractor immunity, not because the defense lacks merit, but simply because of the Bush Administration’s refusal to provide any information about the warrantless surveillance program. While many liberals may not be very concerned about fairness to telecommunications companies, a fair-minded view of the situation would have to concede that these companies do have a point in raising the issue of the need for some form of civil immunity.
The new FISA statute deals with the issue in a compromise fashion, although opponents of the statute prefer to categorize this as a capitulation to the demands of the Bush Administration and the telecommunications companies. Under the new statute, lawsuits against telecommunications companies for assisting in warrantless surveillance during the period from September 11, 2001 to January 17, 2007 will be dismissed if the Attorney General files a certification stating that the assistance provided by the company was done pursuant to a written directive from the President, and that the purpose of the interception was to prevent a terrorist attack against the U.S. The court in which the lawsuit is pending is empowered to conduct discovery and require the production of additional information from the government in order to determine whether or not the certification is in fact supported by substantial evidence.
Obama’s position was that the telcom immunity provision should have been deleted, or at least held in abeyance, until we know more about what actually occurred in Bush’s warrantless surveillance program. Granting any form of immunity now seems like “buying a pig in a poke”. Notably, in one of the highly salutary provisions of the new statute, the offices of the Inspector General of the Department of Justice, Department of Defense, Director of National Intelligence, and National Security Agency, are required to submit reports to Congress concerning the nature and scope of Bush’s warrantless surveillance program. One of the unsuccessful amendments to the new statute supported by Obama and others would have delayed the effectiveness of the telcom immunity provision until after the completion of these reports.
Given the intransigence of the Bush Administration and the Congressional Republicans in supporting telcom immunity, Obama made the correct call in determining that the shortcomings in the immunity provision do not provide a sufficient reason for voting against the statute. My reasoning is as follows:
First, there is no reason to view the certification procedure set forth in the telcom immunity provision as a meaningless exercise. Immunity will be granted only if a court determines that there is substantial evidence establishing that the company acted at the specific written directive of the President, and that the purpose of the interception was to prevent a terrorist attack against the U.S. Under this provision, some measure of judicial scrutiny will be brought into the process, and immunity will not be given out on a wholesale basis. Most importantly, immunity will not be available in any case in which the surveillance was conducted for improper or political purposes, unrelated to the prevention of a terrorist attack against the U.S.
Second, if Obama becomes President, there is no reason why he cannot authorize full disclosure of the extent of wrongdoing committed by the Bush Administration in conducting warrantless surveillance. Specifically, there is no reason why Obama cannot disclose the identities of any persons whose communications were wrongfully intercepted. Such persons could then readily establish standing to bring suits against individual officials in the Bush Administration. As noted, the new FISA statute does not grant immunity, civil or criminal, to officials of the Bush Administration who participated in violations of FISA.
Stop Dumping On Obama
In sum, the enactment of the new FISA statute does not mean that the constitution is dead. Nor does it mean that Obama is a dishonest politician unworthy of our support. On the contrary, Obama’s well thought-out position on the new FISA statute indicates to me that he is a careful legislator, capable of understanding important nuances, fully cognizant of the fact that compromise is the essence of the democracy.
A reader may wonder why any credence should be paid to what I have to say on this issue, when constitutional “experts” such as Professor Turley and the ACLU have been so vehement in their opposition to the new FISA statute. Notably, Morton Halperin, a well-known civil libertarian who was himself the target of unlawful warrantless surveillance during the Nixon Administration, has spoken publicly in favor of the new statute. http://www.nytimes.com/2008/07/08/opinion/08halperin.html?_r=1&em&ex=1215662400&en=0686287e0ee393f0&ei=5087%0A&oref=slogin The ACLU has a particular view about constitutional law, a view that, for the most part, has never been accepted by the Supreme Court or any other court, and is well outside of the mainstream of constitutional analysis. In this regard, it should be emphasized that the ACLU opposed such widely-supported security measures as airport inspection procedures. The ACLU also opposed the old FISA statute, which it also believes to be unconstitutional.
Civil libertarians are fond of quoting Benjamin Franklin’s aphorism that “those who would exchange liberty for security deserve neither.” In considering how much weight to give to that remark, I am tempted to quote a line from the song that Benjamin Franklin’s character sings in the musical “1776”:
“The things I write, are only light, extemporanea.”
While Franklin's quip is a useful reminder of the need to protect constitutional rights in times of national emergencies, it is, in many ways, better suited to being used as a bumper sticker rather than a foolproof guide to public policy. In fact, we balance personal liberty against public safety all the time: when we require airline passengers to permit their persons and belongings to be searched, or for that matter, when we require all Americans to file accurate tax returns laying bare the details of their financial lives. Life is more complicated than is imagined by the ACLU and its supporters.
So, I would urge liberals to calm down. Stop, think, and remember: we have a unique opportunity this year to elect a new President who is really, really special.
Friday, June 13, 2008
An Island Of Sanity
The first story concerned Treasury Secretary Henry M. Paulson Jr. and his role in ongoing trade negotiations with China. On June 11, 2008, the Times ran a story headed, "Paulson's Path To China: Making Some Progress, But Still Miles to Go." http://www.nytimes.com/2008/06/11/business/worldbusiness/11trade.html The article discusses the efforts being made by Secretary Paulson to maintain good trade relations with China in the face of possible hostile protectionist legislation in Congress. The article begins by noting the importance of America's economic relationship with China to Paulson's mission as Treasury Secretary:
"Two years ago, Treasury Secretary Henry M. Paulson Jr. left Goldman Sachs and joined the Bush administration, hoping to use his expertise and contacts to ease economic tensions with China. His other goal was to stop Congress from passing legislation that might make tensions worse."
The story recounts the efforts that Paulson has made to persuade the Chinese to revise certain of their monetary and regulatory policies that have impeded American exports, and that have drawn the wrath of protectionist voices in the U.S. However, the article also describes Chinese displeasure with many of the policies of the Bush Administration, particularly the irresponsible fiscal policies that have brought about the rapid depreciation of the dollar, "choking the global economy with high oil and food prices" and shrinking "the value of reserves held by China and other countries."
While the article concentrated primarily on the economic issues entailed in Paulson's valiant efforts to maintain rationality in Sino-American relations, the article might also have noted the potential inconsistency between Paulson's determination to ensure that the United States-China relationship continues "growing in a positive direction," as Paulson recently told the Carnegie Endowment for International Peace, and the increasing saber rattling about China emanating from numerous neoconservatives. Pundits such as Robert Kagan and William Kristol, both key advisers to Senator McCain, have become increasingly bellicose in their talk about China and their warnings about the need for the U.S. to prepare for a potential military confrontation with China (as well as Russia). Kagan's new book, The Return of History and The End of Dreams(Kagan's book will be the subject of an upcoming blog) is an unabashed call to arms for the U.S. to prepare for an inevitable confrontation with the "autocratic" powers of the world, the most important of which is China. Indeed, Kagan's strategic vision underlies McCain's proposal for the U.S. to become the leader of a "league of democracies" that will carry on the fight against the supposed implacable bastions of authoritarianism in China and Russia.
In sum, Paulson's efforts to promote a vigorous and mutually-beneficial economic relationship between the U.S. and China face resistance from both the Left and the Right. From the Left, there are protectionist forces in Congress and the media urging economic retaliation against China and seeking to blame free trade for all of the ills of the American economy. From the Right, there are the neoconservatives, rejecting the idea that global peace can be promoted through economic integration and spoiling for military confrontation with America's potential rival for superpower status. Parenthetically, it is the aggressive military posture promoted by the neoconservatives that also gives rise to the irresponsible fiscal policies pursued by the Bush Administration (see my earlier post, "It's All Connected"). Those are the very fiscal policies that the Chinese correctly view as a source of great danger to their own economic well-being.
The second story concerned the announcement of economist Jason Furman as a leading economic adviser to Senator Obama. On June 12, 2008, the Times ran a story headed, "Union Critical of Obama's Top Economics Aide." http://www.nytimes.com/2008/06/12/business/12econ.html Before signing on with the Obama campaign, Furman had previously been the Director of the Hamilton Project, a policy research group and part of the Brookings Institution. In that capacity, Furman had worked closely with former Treasury Secretary Robert Rubin, the principal organizer of the Hamilton Project. Furman is well-known for his support of free trade, in particular, having written favorably about Walmart as a business model for the 21st Century's global economy that produces many benefits for workers and consumers. The announcement of Furman's appointment by the Obama campaign drew the ire of the President of the AFL-CIO, who criticized Furman as a friend of "Wall Street", whose support for free trade "is causing working families real pain." Other populist opponents of free trade also expressed concern about Obama's appointment of Furman.
There is an obvious linkage in these two stories. Both stories relate to free trade and protectionist opposition to it, particularly within the ranks of the Democratic Party. However, there is a more specific, particularized connection between the stories: both stories relate to the fabulously successful Wall Street investment banking firm of Goldman Sachs. Secretary Rubin and Secretary Paulson both served as Chairs of Goldman Sachs prior to their government service.
Goldman Sachs is a good example of what may well be the best that America can produce. It is a manifestation of what Lisa Endlich aptly described in her book about the firm as "the culture of success." It is a firm populated by people who are driven, dedicated, phenomenally ambitious, and unsatisfied with anything less than absolute excellence. It is sort of like the financial world's equivalent of the Marine Corps. I would like to think that I once worked for another government office, the Office of the United States Attorney for the Southern District of New York, that had a similar work ethic and esprit de corps. The main difference is that the partners at Goldman Sachs are extraordinarily rich.
In many respects, Goldman Sachs has been the one constant -- an "island of sanity" -- in the hyper-partisan atmosphere that has polluted American politics for the past twenty-five years. When Paulson was named by Bush as the new Treasury Secretary, one Democratic wag was prompted to comment that the Bush Administration was in such desperate straits that it was being forced to "scrape the top of the barrel." Democrats would be well-advised to resort to the same barrel. Obama's selection of Furman as a top economic adviser indicates that he is doing so.
Goldman Sachs is something of a bete noir in ideological circles on both the far Right and the far Left. When Paulson's designation as Treasury Secretary was first announced, it drew opposition from elements of the extreme Right. Rightists faulted Paulson for his support for environmental causes, and in particular, for his support of the Kyoto Treaty on global warming. Rightists also accused Paulson of showing insufficient support for "traditional property rights", which apparently means the untrammeled use of private property to rape the earth.
Hostility to Goldman Sachs is equally resounding on the Left. The mere mention of "Rubinomics" is certain to cause apoplexy among "populists" on the Left. Goldman Sachs is the poster child for the view that the Clinton Administration was too solicitous of the needs of "Wall Street." As the recent criticism of Furman makes clear, there is a lingering fear in these circles that an Obama Administration will have similar inclinations.
Goldman Sachs is an excellent illustration of the fact that traditional Marxian class-based analyses are totally misplaced in today's world. In our mature capitalist society, political and social divisions are based on ideology and beliefs, not on class. On the one side you have people like Rubin, Paulson, and Furman: people who are tolerant, scientific and non-dogmatic in their perspectives on life, willing to take a globalized view of the future of humanity, and seeing the promotion of connectivity and commerce as the best way to achieve global peace and prosperity. Robert Rubin's outstanding memoir, In An Uncertain World, encapsulates the mind-set perfectly. On the other side you have their opponents on both the Right and the Left: jingoistic, dogmatic, short-sighted, intolerant, and seeing confrontation, often of a military nature, as the principal component of global strategy. I know which group I prefer, and the divide has nothing to do with economic class.
Obama has often spoken of the need to break through the partisan logjam that has crippled the American political system. In Goldman Sachs, we see the model for a culture that can lead the way out. A commitment to excellence, growth, innovation and opportunity -- these are the attributes of a better America for the 21st Century.
Friday, April 4, 2008
Welcome
Accordingly, I have adopted the new name, "Democratic Core." The name has lots of meanings. I consider myself a Democrat to the core. Expressing opinions on political issues, as I am doing in this blog, is at the core of democracy.
I also picked the name because of my interest in the writings of Thomas P.M. Barnett. My wife accuses me of having a "man crush" on Barnett. I don't think that's the case. I just find him to be a very interesting and original thinker and writer. While there are some major points on which I disagree very strongly with Barnett -- for example, he supported the Iraq War, and as readers of my old blog know, I opposed it to my "core" -- but on balance, I find that Barnett offers about the most insightful analysis of the current state of the world that one is likely to find. He is challenging and he cuts across traditional Left/Right ideological categories, a position in which I occasionally find myself. Anyone interested should take a look at Barnett's blog, www.thomaspmbarnett.com.
Anyway, the connection between the name of this blog and Barnett's writings has to do with the term "Core." Barnett uses the term "Core" to refer to the parts of the world that are connected to the global economy, or, what he calls "the functioning Core of globalization."
Thus, here I am - writing in the Core, a member of the Democratic Party, and a believer in democracy. I hope you enjoy what I have to say.
It's All Connected
The first of these speeches drew by far the greatest attention. It was, quite rightly, widely applauded as an "historic" political event. The historic nature of the speech derives not only from the extraordinarily eloquent and insightful content of the speech, but also from the symbolism inherent in Senator Obama’s campaign, namely, the fact that he is the first person of African ancestry with a meaningful opportunity to be elected President of the United States.
Looking beyond the symbolism of his campaign and the eloquence of his speeches, however, I am frequently impressed by the analytical nature of Obama’s addresses. To a greater extent than any politician in recent memory, Obama uses careful analysis, including detailed understanding of historical reference points, in order to advance his arguments.
The juxtaposition of the three speeches that Obama delivered during recent weeks is, in my opinion, not an accident. In fact, the three speeches are interconnected in that they all relate to certain common and fundamental questions that are at the heart of the issues that are at stake in this year’s election. Those questions are:
(1) What is the nature of the relationship between the American government and the American people?
(2) What is the nature of America's relationship with the rest of the world?
(3) What is the nature of the ideology that will drive America’s actions during the Twenty-First Century?
Obama's speeches propound answers to these questions that will set America on a fundamentally new direction in the Twenty-First Century.
I. A More Perfect Union
Before we can begin to think seriously about America's role in the world, we first need to understand ourselves, and recognize both our divisions and our common goals. Appropriately, that is where Obama starts. Obama sums up his purposes in his own typically eloquent words:
"This was one of the tasks we set forth at the beginning of this campaign - to continue the long march of those who came before us, a march for a more just, more equal, more free, more caring and more prosperous America. I chose to run for the presidency at this moment in history because I believe deeply that we cannot solve the challenges of our time unless we solve them together - unless we perfect our union by understanding that we may have different stories, but we hold common hopes; that we may not look the same and we may not have come from the same place, but we all want to move in the same direction - towards a better future for our children and our grandchildren."
A great man once said, "Why dost thou behold the mote in thy neighbor's eye, but consider not the beam in thine own eye?" That is the dilemma that Obama seeks to grapple with in his first speech. It is generally known as Obama's "race speech", although Obama himself entitled the speech, "A More Perfect Union." I will join in the chorus of praise that generally accompanied the speech: I believe that it is one of the greatest political speeches in American history. It is a great speech because it makes an attempt to look honestly at divisions within American society. The speech is an attempt to reconcile sincere, but mature, patriotism, with a direct account of the flaws in American society. America cannot very well claim to be in a position of leadership in addressing the problems faced by the people of the world in the Twenty-First Century era of globalization, if America cannot address its own internal divisions. In short, Obama is asking us to remove the beam from our own eye, so that we can better help our neighbors remove the motes from their eyes.
In order to begin to address the three fundamental questions that I have articulated at the outset, and even more basically, in order to understand why these questions are so fundamental, it is first necessary to step back and look at the nature of the world today. There is a basic dichotomy that defines the state of the world; that is, the division between the parts of the world that are connected to and participants in the globalized economy, and the parts that are not. This dichotomy was first articulated by the radical sociologist and theorist of globalization Immanuel Wallerstein, who coined the terms "Core" and "Periphery" to categorize the connected vs. the unconnected parts of the world. This analytical framework was cribbed by the neo-liberal military strategist Thomas P.M. Barnett in his book, The Pentagon’s New Map, which re-christened Wallerstein’s categories as the "Core" and the "Gap." Regardless of the nomenclature used, the key factor basic to any understanding of today's world is connectivity, namely, the division between those parts of the world that are connected to and participating in the global economy, and those that are not.
Wealth vs. poverty is not the only difference that exists between the parts of the world that are participating in the global economy as compared to those that are not. Communities that are participating in the global economy have the basic infrastructure that enables their members to be successful economic actors. Thus, the connected "Core" communities have attributes such as good educational systems, since uneducated workers cannot succeed in the global economy; good health care systems, since chronically ill workers cannot succeed in the global economy; and good legal systems and respect for the law, since business cannot flourish in a violent, corrupt, unjust, and lawless environment. To be sure, these attributes will inevitably contribute to the advancement of the economic fortunes of the community, but again, it is important to emphasize that it is these underlying characteristics or the lack thereof, and not the resulting wealth or poverty, that determine whether or not a community is a successful participant in the global economy.
Generally, analysts such as Wallerstein and Barnett have viewed this dichotomy in an international context, classifying particular nations as either "Core" or "Gap." However, the discrepancy is really more deep-seated, existing at the community level. Thus, it is the case that some portions of a particular country may be connected to the global economy, while other portions of the same country are not. This dichotomy exists most dramatically in the countries that have most recently become connected to the global economy, namely, China, India, Brazil, and Russia and the rest of Eastern Europe. Throughout these countries, we see that while much of the population, particularly in urban centers, is now participating in the global economy, much of the rest of the population, particularly in rural areas, remains unconnected. At the other extreme, we may think of nations with well-established capitalist economies, such as Western Europe and Japan, as consisting almost entirely of populations that are connected to and participating in the global economy. However, because of labor shortages, immigration is likely to be a major economic force in these countries in the next decade – it already is in Western Europe – and as a result, we are likely to see the growth of "Gap-like" communities within these countries.
The situation in the United States is quite different from that of other advanced capitalist economies, such as Western Europe and Japan. The United States is a country whose history has been shaped entirely by immigration, and accordingly, it is a country that has an extraordinarily high degree of diversity among its peoples, and its relationship to the global economy is therefore a very complex one. On the one hand, we tend to think of the United States as sitting at the pinnacle of the global economy, and in many respects, it is. Nevertheless, there are unquestionably pockets of the American population whose ability to participate in the global economy is restricted. An obvious example of this is the community of recent undocumented immigrants, primarily from Latin America, whose illegal status within the United States restricts their ability to become fully functioning participants in the American economy. Another example may well be the blue collar industrial workers living in the American "rust belt." Because the United States has lagged in pursuing policies that will maintain the competitiveness of certain American heavy industries, notably industries such as steel and automobiles, the "rust belt" community is also finding itself less and less connected to, and therefore less capable of participating in, the global economy.
The African-American community is the most glaring example of a segment of American society that lags behind the rest of the country in its ability to participate in the global economy. As Obama emphasized in his speech, the history of the African-American community accounts for its unique status in American society. Africans were brought to America under conditions of brutal enslavement, were treated as non-human property for centuries, and were denied basic human rights until less than fifty years ago. It is hardly surprising that racial bitterness and division exist in the United States. As a result of its persistent treatment as an inferior segment of American society, the African-American community has frequently endured the conditions that prevail in Barnett’s "Gap", namely, an inferior educational system, inadequate health care and other social services, and a legal system that is discriminatory and oppressive. These are precisely the conditions that impede the African-American community’s ability to enjoy the benefits of full participation in the American, and therefore the global, economy.
This, then, is the subtext of Obama’s justifiably celebrated speech on the subject of American race relations. The issue of racial division must be viewed in the broader context of the lack of connectivity of certain segments of American society. Historically, many politicians, aided and abetted by the media, have sought to perpetuate these various divisions of race, ethnicity, and class, in order to advance narrow short-term political interests. Obama candidly acknowledges that there are figures in both the white and black communities who are guilty of exploiting these divisions for their own ends. The consequence of this perpetuation of division is that this lack of connectivity persists within the United States itself – an extraordinary, and shameful, fact considering America’s status as the leader of the global economy.
Seizing upon the Constitution’s charge of forming a "more perfect union", Obama calls for the rejection of the politics of division:
"At this moment, in this election, we can come together and say, 'Not this time.' This time we want to toalk about the crumbling schools that are stealing the future of black children and white children and Asian children and Hispanic childrean and Native American children. This time we want to reject the cynicism that tells us that these kids can't learn; that those kids who don't look like us are somebody else's problem. The children of America are not those kids, they are our kids, and we will not let them fall behind in a 21st Century economy. Not this time."
Obama clearly defines the proper role of government as being the promotion of connectivity, and the creation of an infrastructure – education, health care, justice – that will lead to the empowerment of all groups in America to be able to participate in the global economy. Obama answers the first of my three questions quite clearly. The relationship between the American government and the American people must be based on the principle of unity, not division. The essential role of the government must be as unifier, an engine to promote connectivity among all groups in American society, so that all Americans can enjoy the benefits of full economic participation, and have the opportunity to develop their individual abilities to the fullest extent.
Understanding this fundamental point -- that America must first empower all of its own citizens as full-fledged participants in the global economy before it can presume to take on the mantle of world leadership -- leads directly to the linkage to Obama’s second speech, dealing with the war in Iraq and American foreign and military policy in general.
II. The Iraq War and America's Role In The World
What we call "foreign policy" is basically a formulation of my second question above, namely, defining America’s relationship with the rest of the world. During the Bush Administration, America has defined its relationship with the rest of the world primarily in terms of military domination. This view of America’s relationship to the rest of the world was famously articulated by the Project for a New American Century (PNAC), an organization that arose in the late 1990's and was headed by future leaders of the Bush Administration such as Dick Cheney and many prominent "Neo-Conservatives", such as Paul Wolfowitz, Richard Perle, and William Kristol.
The PNAC worldview is based on the premise that in the aftermath of the Cold War, America is the sole superpower left in the world, and that if the U.S. acts quickly to consolidate its position through aggressive military action throughout the world, but particularly in resource-rich areas such as the Middle East, before "rising China" can become a rival superpower, America can establish a regime of long-term global domination unrivaled by any power since the time of Rome. The PNAC view holds that the U.S. is able to dominate the global economy by reason of its military prowess, and that America’s relationship with those parts of the world not connected to the global economy should therefore be based upon the liberal use of military force in order to eliminate any potential dangers to American hegemony emanating from the unconnected portions of the world, and to enable the U.S. to continue exploiting the natural resources of those countries.
The Bush Administration's adherence to the PNAC blueprint is uncannily faithful. The most blatant manifestation of the Bush Administration's implementation of the PNAC vision of America’s role in the world is the Iraq War, but it can be seen in all aspects of the Bush Administration’s foreign policy, namely, in its emphasis on unilateralism and militarism, and its general disdain for diplomacy.
The nature of America’s relationship with the rest of the world derives primarily from the ideology that drives the actions of America’s leaders – my third question set forth at the outset. The dominant ideology held by America’s decision makers during the Bush years is basically the ideology described and explored in Walter Russell Mead’s brilliant 1999 essay, "The Jacksonian Tradition." This ideology is characterized by extreme jingoism, unquestioned faith in military force as the basis for solving problems, disdain for diplomacy, and a general suspicion of intellectualism. These characteristics describe the Bush Administration to a tee.
McCain embodies this same "Jacksonian" ideology. If anything, McCain seems even more enthusiastic about the militarization of American foreign policy than Bush has been, with his invocation of the Beach Boys’ song "Barbara Ann", rephrased as "Bomb Iran", and his cavalier acceptance of the prospect of a 100-year military occupation of Iraq by the United States. While McCain’s most recent foreign policy speech did promote limited ideas about the necessity of multilateralism, on the surface, a departure from the Bush Administration’s policies, but in actuality, McCain was merely calling for the world’s "democracies", i.e ., the nations of Western Europe, to play a larger role in supporting the United States in its military adventures in the Middle East, and presumably, elsewhere. McCain’s vision of America’s relationship to the rest of the world continues to rest very much on an "Us versus Them" paradigm, in which "We" will continue to maintain a position of dominance through the aggressive exercise of military force.
This "Jacksonian" ideology also shapes the Bush Administration’s view of the domestic relationship between the American government and the American people. Thus, the Bush Administration’s policies have been characterized by a decrease in respect for the rule of law and the growing use of brute force, including suspension of habeas corpus, use of torture, warrantless electronic surveillance, etc. The right wing of the Republican Party favors policies of subjugation both in America's relationship with the rest of the world, and in dealing with the unconnected segments of the American population, as, for example, in aggressive efforts to employ criminal prosecutions against undocumented aliens. A good illustration of the fact that the Bush Administration’s domestic policies mirror its militarization of American foreign policy can be seen in the fact that the United States now has a higher percentage of its population in prison than any other nation in the world. The racial inequalities implicit in this statistic are staggering.
McCain has occasionally stepped back from some of the more extreme manifestations of the right-wing Republican domestic agenda, but he has ultimately gone along with those policies. Indeed, during this campaign, McCain has become pretty much an uncritical advocate for the policies of the Bush Administration, both foreign and domestic. This is shown by his recent retreat in his opposition to the use of torture and the backing off from some of his more liberal immigration policies in favor of the "border security" rhetoric favored by the Republican Right.
Obama's speech on the Iraq War directly links the domestic and foreign consequences of the Bush Administration's implementation of policies derived from right-wing Republican ideology:
"What we've seen these last few years is what happens when the rigid ideology and dysfunctional politics of Washington are projected abroad. An ideology that does not fit the shape of the times cannot shape events in foreign countries. A politics that is based on fear and division does not allow us to call on the world to hope, and keeps us from coming together as one people, as one nation, to write the next great chapter in the American story."
While both Democratic candidates reject the right-wing Republican domestic policy agenda, there are good reasons to believe that Clinton is a great deal more comfortable with the Republican policy of the militarization of foreign relations than Obama is. Clinton supported the Iraq War and has supported the Bush Administration’s policy of bellicosity towards Iran. While Clinton may have felt the need to adopt these warlike postures in order to counteract any public perception that a female President would be a "weak" leader, it is nevertheless significant that Clinton’s campaign rhetoric has consistently bristled with militaristic symbols. The infamous ads featuring the "3 A.M. telephone call" and the invocation of the "Commander In Chief test" are good examples of the Clinton campaign’s embrace of the bellicose "Jacksonian" ideology of Bush and McCain. Similarly, Clinton’s intense criticism of Obama’s statement that he would be willing to engage in negotiations with any world leader, including the leaders of Iran, further illustrates the Clinton campaign’s support for the continued militarization of foreign policy.
Obama's foreign policy statements, particularly as consolidated in his most recent foreign policy address on the Iraq War, suggest a fundamentally different direction in American foreign policy. As in Obama's speech on race, which, as suggested above, was really a speech about broader issues concerning the relationship between the American government and the American people, the central theme in Obama's approach to foreign policy is connectivity. The United States should be less concerned with the goal of extending its authority through the unilateral exercise of military power, and should instead focus on the establishment of more and stronger international connections that will make it possible for the United States to deal with problems of the Twenty-First Century that are truly global in scope.
Obama views international terrorism, the problem that the Republicans emphasize to the exclusion of virtually everything else, as one such problem requiring global solutions. However, Obama identifies many other problems that can be addressed only through international cooperation, including global climate change, genocide and consequent refugee problems, nuclear proliferation, and the threat of global pandemics. The solution to these problems lies in the strengthening of global connections, not only in the form of concerted multilateral military action, but also through new diplomatic initiatives, through a serious commitment to the eradication of extreme poverty throughout the world, through renewed global commitment to address climate change, through vast expansion of non-military international agencies such as USAID and the Peace Corps, and through a re-dedication to cooperation with international organizations such as NATO and the UN.
Opposition to the Iraq War is, of course, a unifying theme of Obama's foreign policy approach. However, it is incorrect to view Obama as any sort of pacifist or unthinking anti-militarist. Obama's recurring theme in this regard, going back to his celebrated 2002 speech setting forth the reasons for his opposition to the Iraq War, is that he is not opposed to all wars, but only "dumb wars." Plainly, Obama defines the Iraq War as such a "dumb war", but it is important to recognize the reasons why he does so. Obama's criticism of the Iraq War was that it was started without any strategic vision. Obama emphasizes that without any overrarching strategy in mind, it becomes impossible to talk about whether the war has been "won" or "lost", and the inevitable result is precisely what we have, namely, a war with no end in sight. Lacking any global strategy, the Iraq War becomes nothing more than a pointless, but extremely costly, exercise of brute military force:
"When you have no overarching strategy, there is no clear definition of success. Success comes to be defined as the ability to maintain a flawed policy indefinitely. Here is the truth: fighting a war without end will not force the Iraqis to take responsibility for their own future. And fighting a war without end will not make the American people safer."
Thus, Obama rejects the notion that the United States either can or should seek to expand its global influence merely by reason of the fact that it is the world's strongest military power. Rather, Obama identifies the occasions requiring America's use of military force as being carefully calibrated to achieving the immediate objectives at hand. This means that the use of force should almost invariably be confined to multilateral operations and carried out with the explicit goal of promoting connectivity, not subjugation.
Obama sees the need for a new American global strategy suited to the demands of the Twenty-First Century as being rooted in both desirability and necessity. In fact, the open-ended military conflicts initiated by the Bush Administration, which McCain appears intent upon continuing, are untenable as a practical matter. The American military is today dangerously overextended as a result of the Iraq War. And, the economic costs of the war are enormous and ultimately unsustainable. This, then, leads directly into Obama's third recent speech, dealing with the state of the American economy, particularly as it relates to the costs of the Iraq War.
III. The Iraq War and Fiscal Irresponsibility
The direct cost of the Iraq War, approximately $1 trillion, is in itself staggering. However, Nobel Prize winning economist Joseph Stiglitz has recently calculated that the direct and indirect costs of the Iraq War are more in the neighborhood of $3 trillion. This includes costs such as long-term health care for injured veterans and the replacement costs for military equipment lost in the war.
Obama emphasizes the extent to which the costs of the Iraq War have diverted funds that could otherwise be used for purposes needed to shore up the American economy, such as for spending on infrastructure reconstruction, for poverty reduction, for universal health care, as well as for modernization of the American military itself. This diversion of resources, in turn, impedes the accomplishment of the goals articulated in Obama's first two speeches, namely, improvement of connectivity for disadvantaged groups within the United States itself in order to create a "more perfect union", and the promotion of connectivity throughout the world in order to promote the progress of economic globalization.
Obama also emphasizes an additional economic cost of the Iraq War, namely the damage inflicted upon the American economy by the manner in which the Bush Administration has chosen to finance the war. While carrying on this enormously costly war, the Bush Administration has not only failed to increase taxes in order to pay for the war, it has actually implemented huge tax reductions, almost entirely for the benefit of the wealthiest Americans. This policy is unprecedented in American history; indeed, the economic policies of the Bush Administration represent a level of fiscal recklessness virtually unmatched by any country in modern history. Again, there is every reason to believe that these policies would continue to be followed in a McCain Administration. While McCain advocated "straight talk" on tax cuts in his past life, he has now become an ardent supporter of the Bush Administration's tax cuts, giving every indication that he would be content to allow this fiscal irresponsibility to continue into the future.
Obviously, Bush has had to pay for his war somehow, and since the Republicans have no interest in increasing tax revenues, they have instead financed their war through massive borrowings, primarily from foreign governments. In effect, Bush has set the United States on a course of arrogant, clumsy, and unilateral, but extremely expensive, military adventurism, and has insisted that the rest of the world pick up the tab his folly. No other country in the world could possibly get away with this sort of behavior. Imagine if some other country, say Argentina, sought to embark on a program of such deliberate fiscal irresponsibility -- an international body such as the IMF would promptly cut off credit to the country and insist that it get its financial house in order. However, because of the status of the United States as the dominant power in the world, a status derived in part by America's military prowess, it is impossible for international institutions to take meaningful action to put an end to America's fiscal recklessness. As such, the rest of the world has little choice but to underwrite Bush's irresponsible policies.
Some people have expressed concern that Bush's policies are causing the United States to be "in hock" to foreign governments, notably China. These concerns, however, have a xenophobic ring to them, and in my view, miss the point. An apt analogy for the fiscal policies of the Bush Administration would be to the actions of a schoolyard bully who seeks to support himself by extracting milk money from weaker classmates. In a sense, the bully could be viewed as being "in hock" to the nerds who fork over their milk money, but that is not really an accurate view of what is going on in such a situation.
It is also important to look at the consequences of the Bush Administration's irresponsible fiscal policies from the perspective of the lender nations, such as China. The Republicans' free-wheeling credit policies have now permeated the entire American economy, resulting in some noteworthy financial collapses. As a result, the American economy is well on the way into a recession, probably a very severe one. In a desperate attempt to mitigate such a recession and to "stimulate" the American economy, the Federal Reserve has continually reduced interest rates. This means, however, that a lender nation such as China is now being required to lend out substantial amounts of its national wealth to the United States, in the form of U.S. Government bonds, on terms that are increasingly unfavorable. This course of events can be extremely harmful to the Chinese economy. And while many Americans might be tempted to say that they do not care what happens to the economy of China, such an attitude is not tenable in today's global economy. American businesses have enormous investments in China; many American businesses, including America's largest corporation, Walmart, are highly dependent upon Chinese trade. The economic dangers to the United States posed by a possible economic crisis in China cannot be ignored by America's leaders.
Obama's economic speech, although I consider this in many ways to be the weakest of Obama's three speeches (see discussion below), nevertheless accurately pinpoints the root cause of these economic problems in the arrogant foreign policies of the Bush Administration, and the jingoistic delusion of American supremacy on which Bush's policies are based. It is the same mindset that has caused the Bush Administration to carry out a pointlessly destructive war in Iraq that has also caused it to wreak havoc in the global economy through policies of gross fiscal irresponsibility. If the leaders of the government of the United States, i.e., the Bush Administration, believe that America's status as the world's sole superpower entitles it to wage unilateral warfare, without even a colorable argument that such warfare is necessitated by America's security interests and without any strategic vision as to the reasons for doing so, then it is certainly no great leap for the same leaders of the United States government to assert that the American public should not have to pay for such warfare and that America is entitled to have the rest of the world extend it the credit to pay for these military misadventures; in other words, America's brute stength entitles it to act like the schoolyard bully shaking down the nerds for their milk money.
That is the strongest aspect of Obama's critique of the economic consequences of the Iraq War. Above all else, Obama emphasizes that American policies -- foreign, domestic, and economic -- must be driven by principles of responsibility. Amerca cannot embark on military adventures without a clear strategic purpose, wasting its own blood and treasure in the process, and expecting the rest of the world to make up the deficit. The consequences of the Bush Administration's irresponsibility have been devastating. Obama's candid recognition of these failures represents a major step forward towards a productive redirection of America's policies. Again, Obama's own summation says it best:
"We can choose the path of unending war and unilateral action, and sap our strength and standing. We can choose the path of disengagement, and cede our leadership. Or, we can meet fear and danger head-on with hope and strength; with common purpose as a united America; and with common cause with old allies and new partners."
While I hesitate to do so, I am constrained to end my discussion of Obama's speeches on a somewhat discordant note. As noted, I consider Obama's speech on economics to be the weakest of the three. In discussing the dire state of the American economy, Obama unfortunately lapses into occasional protectionist rhetoric in criticizing America's trade policies. In doing so, Obama panders to the resentments of workers who have been the primary victims of the failure of America's "rust belt" industries. These resentments are well represented in some of the powerful interest groups within the Democratic Party, particularly among labor unions and "populists" prone to blame economic globalization for all of America's ills.
Free trade, however, is not the villain in the piece. The causes of the decline of American industry lie elsewhere. Tax and regulatory policies have enabled industries, such as the American automobile industry, to continue producing inferior and outmoded products, unable to compete with far more efficient industries in countries such as Japan, Korea, and China. Indeed, many tax and regulatory policies affirmatively encourage industries to move out of the US. What is needed to revive American industries is not protectionism, but rather, a reevaluation of tax and regulatory policies in order to reward innovation and promote competition. Such an approach has achieved success in promoting efficient industries in many other countries, even in high-wage countries such as Germany. And, to the extent that there are structural factors that make certain American industries inherently less competitive, as in the case of labor-intensive industries in which low-wage countries have an unavoidable advantage, then what is required is re-training and policies designed to foster mobility for American workers, combined with careful maintenance of programs such as Social Security and Medicare, as well as the development of guaranteed universal health care, that will enable workers in such industries to survive the difficulties that may be unavoidable in periods of economic transition.
Genuine free trade is the great engine of economic connectivity, and it is absolutely critical that it not be impeded. I believe that the promotion of connectivity -- among Americans and between Americans and the rest of the world -- is the unifying theme running through each of Obama's speeches, and it is a theme that gives substance to his very positive vision of what America can accomplish in the Twenty-First Century, both for America's own citizens and for all of the people of the world. Obama's embrace of protectionist rhetoric is therefore jarringly inconsistent with the overall vision of connectivity that he presents. The political reality of today's Democratic Party, however, requires Democratic politicians to pay obeisance to the demonization of free trade. It is sobering to consider that a Democratic candidate for President may have a better chance of fostering an honest and mature discussion about America's racial divisions, than of engaging in a clear-headed debate about international trade.
During the Ohio primary, there was a minor flap resulting from reports that Austan Goolsbee, Obama's principal economic adviser, had told Canadian officials not to be concerned about Obama's anti-NAFTA speeches, that such speeches were mere political posturing. There was some question as to whether or not this meeting actually took place, or whether Goolsbee had actually made the statements that were attributed to him. Nevertheless, I tend to take some hope from the possibility that the reports were true.
Goolsbee's own writings about "free trade" agreements such as NAFTA are instructive. Goolsbee has indeed criticized such agreements, but not from a protectionist standpoint. Rather, Goolsbee has argued that agreements such as NAFTA contain so many loopholes for the protection of politically-connected special interests, that they actually do as much to hinder genuine free trade as to promote it. Joseph Stiglitz in his book Making Globalization Work presents a similar critique of the so-called "free trade" agreements that the Bush Administration has been forcing down the throats of America's economically disadvantaged trading partners. American farm subsidies, which US trade negotiators have almost invariably sought to protect in negotiating "free trade agreements", stand out as a particular culprit in this regard. Such subsidies, while providing rich rewards to American agribusiness, have devastating consequences for some of the poorest nations of the world. Viewed from this perspective, the version of "free trade" that the Bush Administration has promoted does more harm than good to the advancement of global connectivity.
We can only hope that in the general election, somewhat freed from the influences of pro-protectionist forces within the Democratic Party, Obama can advance a more nuanced argument about the failures of the Bush Administration's trade policies. Given Obama's rhetorical record so far, I have no doubt that he is up to the job.
IV. Sealing The Connections
"We are all connected." This would be the simplest way of summing up the message of Obama's interconnected trilogy of speeches. It is summed up both by the content of the inspirational speeches for which Obama is rightly praised, and it is summed up in Obama's very existence. Never have the personal and the political come together so powerfully as in Obama's campaign. It all comes together in the form of a beautiful vision for America - and for the world:
"I am the son of a black man from Kenya and a white woman from Kansas. I was raised with the help of a white grandfather who survived a Depression to serve in Patton's Army during World War II and a white grandmother who worked on a bomber assembly line at Fort Leavenworth while he was overseas. I've gone to some of the best schools in America and lived in one of the world's poorest nations. I am married to a black American who carries within her the blood of slaves and slaveowners - an inheritance we pass on to our two precious daughters. I have brothers, sisters, nieces, nephews, uncles, and cousins, of every race and every hue, scattered across three continents, and for as long as I live, I will never forget that in no other country on Earth is my story even possible. It's a story that hasn't made me the most conventional candidate. But it is a story that has seared into my genetic makeup the idea that this nation is more than the sum of its parts - that out of many, we are truly one."