Commentary Magazine


Topic: G-20

FPI Conference (Part 3)

There is an art that the best State Department functionaries master: to take hard questions that present troubling facts or contradictions in policy and to give in response a long, rambling answer that, by the end, dilutes the impact of the question and leaves the audience at a loss to remember what was orginally being asked. There is no one better at this than Deputy Secretary of State James Steinberg, who wrapped up the FPI conference.

It was evident that the administration came with an olive branch to the right and with many fine sentiments about bipartisanship in foreign policy. Who can blame it? The administration’s biggest successes (e.g., Iraq, appointment of Gen. Petraeus in Afghanistan) have been supported by conservatives. With an assertive Republican House and more conservative voices in the Senate, the administration doesn’t need more headaches, so foreign policy offers a chance to show its bipartisan inclinations. One way to do that is not to talk about the hard stuff. So, in his prepared remarks, Steinberg didn’t bring up Iran, the Palestinian-Israeli conflict, Europe, human rights, Hugo Chavez, or other topics that are sources of disagreement between the Obama team and conservatives.

He did talk about Southeast Asia. It’s very important. We are making many trips there. We’re going to have “sustained engagement.” And we’re very “clear-eyed” about China.

His next topics were Iraq and Afghanistan, where he echoed many of Sen. Joe Lieberman’s remarks (and Sen. John McCain’s from the previous day). On Iraq, we need bipartisanship and, yes, more “sustained engagement.” On Afghanistan, again, we must maintain funding. In the Q&A, he expressed himself as delighted with the Afghanistan war-strategy process. It was “serious,” he intoned. He’s never seen a president so involved. And that 2011 deadline? With perfect earnestness he explained: “There is no ambiguity. It is the beginning of a transition.” Really, there was “never any intention to see it as a dramatic turning point. … If we need to do a better job of messaging, we’ll do a better job.”

The third topic was START. (During the conference, Sen. Jon Kyl declared it isn’t going to get a vote in the lame-duck session.) This should be a bipartisan issue too, he asserted. He added that “there are no restraints” on our ability to pursue missile defense, and it comes packaged with an unprecedented commitment to force modernization.

Things got a bit dicier in the Q&A conducted by Robert Kagan. What about human rights in Russia? Why aren’t we talking more about democracy in Egypt? Again, Steinberg, in measured tones, with no hint of defensiveness, argued that “it should be clear” that we remain committed to human rights in Russia. On our support for democracy and human rights in Egypt, you see, it is important “to say it when it matters.” (But not at public news conferences, I suppose.) Kagan pressed him on the G-20: how could we go in there with such dissention between the U.S. and Europe? Oh, now, now. We’ve had hard times with allies in the past. Why is China exhibiting such bullying behavior of late? Ah, it’s a transition period, and there are many voice there. Why aren’t we getting these free-trade agreements done? Well, on South Korea, sometimes the “work just is not ready,” so we’ll keep at it. Colombia? He’s very encouraged.

Steinberg is such an articulate and calm figure, the consummate professional, that you’d almost forget listening to him that Obama’s Middle East policy is in shambles, that Iran is on the ascendency and on the road to getting the bomb, that our human-rights policy is under attack by the left and right, that Russia and China are both feeling emboldened to extend their influence, and that our relations with Europe are badly frayed. But what comes across loud and clear is that the Obama team wants to be perceived as operating well within the bipartisan tradition of American foreign policy. If that entails an ongoing presence in Iraq, a sustained effort in Afghanistan, a determination to deny Iran nuclear weapons, a cessation of its foolhardy obsession with Israeli settlements, a competent and forceful free-trade policy, and consistent defense of human rights, then the administration will earn the support of conservatives and, more important, the respect of foes and the confidence of allies.

There is an art that the best State Department functionaries master: to take hard questions that present troubling facts or contradictions in policy and to give in response a long, rambling answer that, by the end, dilutes the impact of the question and leaves the audience at a loss to remember what was orginally being asked. There is no one better at this than Deputy Secretary of State James Steinberg, who wrapped up the FPI conference.

It was evident that the administration came with an olive branch to the right and with many fine sentiments about bipartisanship in foreign policy. Who can blame it? The administration’s biggest successes (e.g., Iraq, appointment of Gen. Petraeus in Afghanistan) have been supported by conservatives. With an assertive Republican House and more conservative voices in the Senate, the administration doesn’t need more headaches, so foreign policy offers a chance to show its bipartisan inclinations. One way to do that is not to talk about the hard stuff. So, in his prepared remarks, Steinberg didn’t bring up Iran, the Palestinian-Israeli conflict, Europe, human rights, Hugo Chavez, or other topics that are sources of disagreement between the Obama team and conservatives.

He did talk about Southeast Asia. It’s very important. We are making many trips there. We’re going to have “sustained engagement.” And we’re very “clear-eyed” about China.

His next topics were Iraq and Afghanistan, where he echoed many of Sen. Joe Lieberman’s remarks (and Sen. John McCain’s from the previous day). On Iraq, we need bipartisanship and, yes, more “sustained engagement.” On Afghanistan, again, we must maintain funding. In the Q&A, he expressed himself as delighted with the Afghanistan war-strategy process. It was “serious,” he intoned. He’s never seen a president so involved. And that 2011 deadline? With perfect earnestness he explained: “There is no ambiguity. It is the beginning of a transition.” Really, there was “never any intention to see it as a dramatic turning point. … If we need to do a better job of messaging, we’ll do a better job.”

The third topic was START. (During the conference, Sen. Jon Kyl declared it isn’t going to get a vote in the lame-duck session.) This should be a bipartisan issue too, he asserted. He added that “there are no restraints” on our ability to pursue missile defense, and it comes packaged with an unprecedented commitment to force modernization.

Things got a bit dicier in the Q&A conducted by Robert Kagan. What about human rights in Russia? Why aren’t we talking more about democracy in Egypt? Again, Steinberg, in measured tones, with no hint of defensiveness, argued that “it should be clear” that we remain committed to human rights in Russia. On our support for democracy and human rights in Egypt, you see, it is important “to say it when it matters.” (But not at public news conferences, I suppose.) Kagan pressed him on the G-20: how could we go in there with such dissention between the U.S. and Europe? Oh, now, now. We’ve had hard times with allies in the past. Why is China exhibiting such bullying behavior of late? Ah, it’s a transition period, and there are many voice there. Why aren’t we getting these free-trade agreements done? Well, on South Korea, sometimes the “work just is not ready,” so we’ll keep at it. Colombia? He’s very encouraged.

Steinberg is such an articulate and calm figure, the consummate professional, that you’d almost forget listening to him that Obama’s Middle East policy is in shambles, that Iran is on the ascendency and on the road to getting the bomb, that our human-rights policy is under attack by the left and right, that Russia and China are both feeling emboldened to extend their influence, and that our relations with Europe are badly frayed. But what comes across loud and clear is that the Obama team wants to be perceived as operating well within the bipartisan tradition of American foreign policy. If that entails an ongoing presence in Iraq, a sustained effort in Afghanistan, a determination to deny Iran nuclear weapons, a cessation of its foolhardy obsession with Israeli settlements, a competent and forceful free-trade policy, and consistent defense of human rights, then the administration will earn the support of conservatives and, more important, the respect of foes and the confidence of allies.

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A More Dangerous World

COMMENTARY contributor Bret Stephens identifies the cumulative danger posed by an administration obsessed by multilateralism and possessing many false and bad ideas about international affairs:

Last week, Mr. Obama was so resoundingly rebuffed by other leaders at the G-20 summit in Seoul that even the New York Times noticed: Mr. Obama, the paper wrote, faced “stiff challenges… from the leaders of China, Britain, Germany and Brazil.” His administration has now been chastised or belittled by everyone from the Supreme Leader of Iran to the finance minister of Germany to the president of France to the dictator of Syria. What does it mean for global order when the world figures out that the U.S. president is someone who’s willing to take no for an answer?

The answer is that the United States becomes Europe. Except on a handful of topics, like trade and foreign aid, the foreign policy of the European Union, and that of most of its constituent states, amounts to a kind of diplomatic air guitar: furious motion, considerable imagination, but neither sound nor effect. When a European leader issues a stern demarche toward, say, Burma or Russia, nobody notices. And nobody cares.

And, as Bret points out, the world becomes more chaotic, and the smaller democracies get the shaft as a result of America’s feckless approach:

The small and distant abuses of power, would grow bolder and more frequent. America’s exhortations for restraint or decency would seem cheaper. Multipolarity is a theory that, inevitably, leads to old-fashioned spheres of influence. It has little regard for small states: Taiwan, Mongolia, Israel, Georgia, Latvia, Costa Rica.

That approach to foreign affairs is also characterized by an inordinate amount of disingenuousness. Obama says he’s in favor of free trade but loses the face-off with South Korea because he is on the side of the auto companies’ efforts to maintain protectionist barriers just a little bit longer. Obama says he’s a grand friend of Israel but continues the lopsided public bullying of Israel. Obama says he’s a great champion of human rights and democracy, but his policy choices are curiously lacking in any meaningful assistance for the oppressed and any real opposition to the oppressors. There is, to be blunt, a collapse of our moral standing and our credibility, which is frittered away in an effort to mask the essential amorality of our policy.

Gradually the bullies and the despots get the idea the U.S. can be played and its allies pushed about. We’ve been down this road before, and the results are never good.

COMMENTARY contributor Bret Stephens identifies the cumulative danger posed by an administration obsessed by multilateralism and possessing many false and bad ideas about international affairs:

Last week, Mr. Obama was so resoundingly rebuffed by other leaders at the G-20 summit in Seoul that even the New York Times noticed: Mr. Obama, the paper wrote, faced “stiff challenges… from the leaders of China, Britain, Germany and Brazil.” His administration has now been chastised or belittled by everyone from the Supreme Leader of Iran to the finance minister of Germany to the president of France to the dictator of Syria. What does it mean for global order when the world figures out that the U.S. president is someone who’s willing to take no for an answer?

The answer is that the United States becomes Europe. Except on a handful of topics, like trade and foreign aid, the foreign policy of the European Union, and that of most of its constituent states, amounts to a kind of diplomatic air guitar: furious motion, considerable imagination, but neither sound nor effect. When a European leader issues a stern demarche toward, say, Burma or Russia, nobody notices. And nobody cares.

And, as Bret points out, the world becomes more chaotic, and the smaller democracies get the shaft as a result of America’s feckless approach:

The small and distant abuses of power, would grow bolder and more frequent. America’s exhortations for restraint or decency would seem cheaper. Multipolarity is a theory that, inevitably, leads to old-fashioned spheres of influence. It has little regard for small states: Taiwan, Mongolia, Israel, Georgia, Latvia, Costa Rica.

That approach to foreign affairs is also characterized by an inordinate amount of disingenuousness. Obama says he’s in favor of free trade but loses the face-off with South Korea because he is on the side of the auto companies’ efforts to maintain protectionist barriers just a little bit longer. Obama says he’s a grand friend of Israel but continues the lopsided public bullying of Israel. Obama says he’s a great champion of human rights and democracy, but his policy choices are curiously lacking in any meaningful assistance for the oppressed and any real opposition to the oppressors. There is, to be blunt, a collapse of our moral standing and our credibility, which is frittered away in an effort to mask the essential amorality of our policy.

Gradually the bullies and the despots get the idea the U.S. can be played and its allies pushed about. We’ve been down this road before, and the results are never good.

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Obama — a Weak Advocate for Free Trade

Obama’s international endeavors are going about as well as his party’s electoral efforts. The latest flop: “The presidents of the U.S. and South Korea were unable to overcome disputes over cars, cattle and domestic politics, potentially killing the biggest bilateral trade deal the U.S. has taken up in more than a decade.” It is worth examining why the president couldn’t make a deal.

In essence, Obama has refused to stand up to domestic advocates of protectionism — a failure that stands in contrast to the actions of past presidents from both parties. And, no doubt, the South Koreans calculated that they might as well try to wait him out. It sure doesn’t seem that Obama was on the side of the angels — or of free trade. This tells you all you need to know:

Labor leaders and some powerful politicians from both parties praised Mr. Obama for not going ahead with a deal they characterized as bad for U.S. workers. “President Obama is exactly right in holding out for a deal that puts working people’s interests first,” said Richard Trumka, president of the AFL-CIO.

Translation: Obama caved to protectionist elements in the U.S.

As a result of this and Ben Bernanke’s printing press, we are increasingly isolated and becoming the object of our trading partners’ criticism:

The trade-talk failure came on top of criticism from other G-20 nations concerning the Federal Reserve’s move to pump billions into the U.S. economy, potentially weakening the dollar.

“This reinforces the opinion of many key global and business leaders that the U.S. isn’t really committed to global engagement and is instead pushing mercantilist, beggar-thy-neighbor policies,” said Matthew Slaughter, a former member of George W. Bush’s Council of Economic Advisers.

As for the particulars, it seems as though Obama wanted to hang on to some protectionist provisions just a little longer. (“One stumbling block was Korea’s refusal to change a provision in the 2007 pact that provided an immediate end to a 2.5% tariff the U.S. levies on imports of Korean cars. … The U.S. wanted the tariff reduced gradually, while Korea eliminates safety and environmental rules that U.S. auto makers, led by Ford, said help keep Korea the world’s most closed car market.”)

Congress has traditionally been more protectionist than the White House, the result of intense lobbying by both U.S. businesses and Big Labor. A strong presidential hand has been required to rebuff protectionist sentiment and negotiate free-trade agreements that are essential to America’s prosperity. To his credit, Bill Clinton did just that. But Obama has neither the will nor the interest in following this approach. This spells trouble for the U.S.:

Meanwhile, the European Union and other nations have signed far more bilateral deals than the U.S. since 1994 when the North American Free Trade Agreement came into effect, displeasing some U.S. industrial companies. “We as a country have essentially taken two years off” from pursuing trade agreements while the rest of the world goes full speed ahead, said Eaton Corp. Chief Executive Alexander Cutler on Thursday. “If you want to have a vibrant economy, you have to have access to the fastest-growing parts of the world.”

You would think a president who ran on the promise to “restore our standing” in the world and end the supposed cowboy unilateralism of his predecessor would understand this.

Obama’s international endeavors are going about as well as his party’s electoral efforts. The latest flop: “The presidents of the U.S. and South Korea were unable to overcome disputes over cars, cattle and domestic politics, potentially killing the biggest bilateral trade deal the U.S. has taken up in more than a decade.” It is worth examining why the president couldn’t make a deal.

In essence, Obama has refused to stand up to domestic advocates of protectionism — a failure that stands in contrast to the actions of past presidents from both parties. And, no doubt, the South Koreans calculated that they might as well try to wait him out. It sure doesn’t seem that Obama was on the side of the angels — or of free trade. This tells you all you need to know:

Labor leaders and some powerful politicians from both parties praised Mr. Obama for not going ahead with a deal they characterized as bad for U.S. workers. “President Obama is exactly right in holding out for a deal that puts working people’s interests first,” said Richard Trumka, president of the AFL-CIO.

Translation: Obama caved to protectionist elements in the U.S.

As a result of this and Ben Bernanke’s printing press, we are increasingly isolated and becoming the object of our trading partners’ criticism:

The trade-talk failure came on top of criticism from other G-20 nations concerning the Federal Reserve’s move to pump billions into the U.S. economy, potentially weakening the dollar.

“This reinforces the opinion of many key global and business leaders that the U.S. isn’t really committed to global engagement and is instead pushing mercantilist, beggar-thy-neighbor policies,” said Matthew Slaughter, a former member of George W. Bush’s Council of Economic Advisers.

As for the particulars, it seems as though Obama wanted to hang on to some protectionist provisions just a little longer. (“One stumbling block was Korea’s refusal to change a provision in the 2007 pact that provided an immediate end to a 2.5% tariff the U.S. levies on imports of Korean cars. … The U.S. wanted the tariff reduced gradually, while Korea eliminates safety and environmental rules that U.S. auto makers, led by Ford, said help keep Korea the world’s most closed car market.”)

Congress has traditionally been more protectionist than the White House, the result of intense lobbying by both U.S. businesses and Big Labor. A strong presidential hand has been required to rebuff protectionist sentiment and negotiate free-trade agreements that are essential to America’s prosperity. To his credit, Bill Clinton did just that. But Obama has neither the will nor the interest in following this approach. This spells trouble for the U.S.:

Meanwhile, the European Union and other nations have signed far more bilateral deals than the U.S. since 1994 when the North American Free Trade Agreement came into effect, displeasing some U.S. industrial companies. “We as a country have essentially taken two years off” from pursuing trade agreements while the rest of the world goes full speed ahead, said Eaton Corp. Chief Executive Alexander Cutler on Thursday. “If you want to have a vibrant economy, you have to have access to the fastest-growing parts of the world.”

You would think a president who ran on the promise to “restore our standing” in the world and end the supposed cowboy unilateralism of his predecessor would understand this.

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Plus Ça Change

A poignant development illustrates the disintegration of the rarefied post-Cold War order we have inhabited since the early 1990s. Against the backdrop of shocks to that order over the past year and half, this little event may seem minor. But it is emblematic of the actions our strategic opponents no longer fear to take openly.

President Obama, currently in Indonesia, will attend the G-20 summit in Seoul on Nov. 11-12. Dmitry Medvedev arrives in Seoul today for a state visit and will hold bilateral talks with South Korea’s Lee Myung-bak prior to the summit. These discussions – in which Korean security and global economic policy are expected to be major topics – continue the theme of Medvedev’s summit with Nicolas Sarkozy and Angela Merkel in October. Each case involves the Russian president talking over the biggest of global and regional issues with key American allies, in advance of the general summits to be held this month (the G-20 meeting in Seoul and the NATO summit in Lisbon).

But that’s not the most telling aspect of Russia’s posture for the G-20 summit in Seoul. That aspect is to be observed down the road in Inchon, from the pier where the flagship of the Russian Pacific Fleet, the missile cruiser Varyag, will be moored throughout the summit. The unambiguous signal from this visit is underscored by the report that South Korea will turn over to Varyag a set of artifacts Russia has been requesting for years: a battle flag and remnants of weapons from Varyag’s namesake, which participated in the Russo-Japanese War more than a century ago.

The earlier Varyag, attacked in Inchon in 1904 by a Japanese task force, was scuttled by the captain rather than being surrendered to the more powerful Japanese flotilla. Artifacts recovered from it by the Japanese have been stored in Inchon for decades – and each year since 1996, the modern cruiser Varyag has visited Inchon in February to commemorate the battle. Besides the latent bellicosity of bringing a warship to a G-20 summit, Russia is dealing a symbolic slap to Japan: occupying, under the aegis of a U.S. ally and an international body, the position in which a Japanese force once inflicted defeat on Russian ships.

To the American mind, the era before World War I seems to have existed across an unbridgeable historical divide. In a geopolitical sense, in particular, we have believed for decades that we inhabit a different order now. The old territorial resentments seem antique and irrelevant for global technological powers; we think of these obsessions as the province of benighted tribal cultures. But it shouldn’t surprise us to see Russia reverting to this age-old pattern. What we have to understand – but probably don’t today – is that this isn’t a meaningless gesture from Russia: it’s a marking of territory. This is how Russia operates. It all matters.

A poignant development illustrates the disintegration of the rarefied post-Cold War order we have inhabited since the early 1990s. Against the backdrop of shocks to that order over the past year and half, this little event may seem minor. But it is emblematic of the actions our strategic opponents no longer fear to take openly.

President Obama, currently in Indonesia, will attend the G-20 summit in Seoul on Nov. 11-12. Dmitry Medvedev arrives in Seoul today for a state visit and will hold bilateral talks with South Korea’s Lee Myung-bak prior to the summit. These discussions – in which Korean security and global economic policy are expected to be major topics – continue the theme of Medvedev’s summit with Nicolas Sarkozy and Angela Merkel in October. Each case involves the Russian president talking over the biggest of global and regional issues with key American allies, in advance of the general summits to be held this month (the G-20 meeting in Seoul and the NATO summit in Lisbon).

But that’s not the most telling aspect of Russia’s posture for the G-20 summit in Seoul. That aspect is to be observed down the road in Inchon, from the pier where the flagship of the Russian Pacific Fleet, the missile cruiser Varyag, will be moored throughout the summit. The unambiguous signal from this visit is underscored by the report that South Korea will turn over to Varyag a set of artifacts Russia has been requesting for years: a battle flag and remnants of weapons from Varyag’s namesake, which participated in the Russo-Japanese War more than a century ago.

The earlier Varyag, attacked in Inchon in 1904 by a Japanese task force, was scuttled by the captain rather than being surrendered to the more powerful Japanese flotilla. Artifacts recovered from it by the Japanese have been stored in Inchon for decades – and each year since 1996, the modern cruiser Varyag has visited Inchon in February to commemorate the battle. Besides the latent bellicosity of bringing a warship to a G-20 summit, Russia is dealing a symbolic slap to Japan: occupying, under the aegis of a U.S. ally and an international body, the position in which a Japanese force once inflicted defeat on Russian ships.

To the American mind, the era before World War I seems to have existed across an unbridgeable historical divide. In a geopolitical sense, in particular, we have believed for decades that we inhabit a different order now. The old territorial resentments seem antique and irrelevant for global technological powers; we think of these obsessions as the province of benighted tribal cultures. But it shouldn’t surprise us to see Russia reverting to this age-old pattern. What we have to understand – but probably don’t today – is that this isn’t a meaningless gesture from Russia: it’s a marking of territory. This is how Russia operates. It all matters.

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RE: Fed’s Plan to Rev Up Printing Press Gets Thumbs Down

The overwhelmingly negative response to the Fed decision to print up $600B to buy bonds is intensifying as Russia and China joined European nations in slamming the move. This report explains:

Mr. Obama returned fire in the growing confrontation over trade and currencies Monday in a joint news conference with Indian Prime Minister Manmohan Singh, taking the unusual step of publicly backing the Fed’s decision to buy $600 billion in U.S. Treasury bonds—a move that has come under withering international criticism for weakening the U.S. dollar.

Gold topped $1,400 an ounce on fears of inflation as investors voted thumbs down on Ben Bernanke’s plan. And the number of critics is growing, leaving the U.S. isolated:

Germany’s criticism echoes that from other countries, including Brazil and Japan, which have complained about potential spillover from the Fed’s action. Printing more dollars, or cutting U.S. interest rates, tends to weaken the dollar and makes U.S. exports more attractive. The accompanying rise in the value of other countries’ currencies tends to damp their exports and can fuel inflation or asset bubbles, as emerging-market officials note. U.S. officials maintain the Fed’s action is about stimulating domestic demand, and that a weaker dollar is a consequence, not an objective.

On Monday, China’s Vice Finance Minister Zhu Guangyao said the U.S. isn’t living up to its responsibility as an issuer of a global reserve currency. …

The top economic aide to Russian President Dmitry Medvedev said Russia will insist at the G-20 summit that the Fed consult with other countries ahead of major policy decisions.

Luxembourg Prime Minister Jean-Claude Juncker, who is chairman of the euro-zone finance ministers, also weighed in on the Fed move, saying: “I don’t think it’s a good decision. You’re fighting debt with more debt.”

These concerns are entirely justified. Moreover, one can’t help but appreciate the irony: the “cowboy” George W. Bush was lambasted for “going it alone” and making the U.S. a pariah in the world. But worldwide resentment over the U.S. is surging as Obama is forced to lamely defend his moves as “pro-growth” (which speaks volumes about the administration’s economic illiteracy, for not even his defenders would claim that currency devaluation=growth). We hear that the “blunt criticism of U.S. policy is in large part payback for a longstanding stance by Washington policy makers that the American economy should serve as a model for others. The heated rhetoric also stems from fears that the U.S. may be looking for a back-door way to set exchange-rate policy in a way that favors the U.S.”

Combined with the incessant shin-kicking of our allies (e.g., Eastern Europe, Israel, Honduras, Britain), this latest move certainly strengthens Obama’s critics here and abroad. They contend that through a combination of ill-conceived policies and rank incompetence, Obama is rendering the U.S. less influential and less respected, which is increasing instability in the world. All and all, it is a textbook example of the perils of deploying liberal statism at home and shrinking America’s stature overseas. Unfortunately, this is not a graduate course at Harvard or a symposium at the New America Foundation. It is all too real, and unless we arrest the panoply of bad policies, America and its allies will be poorer and less safe. We already are.

The overwhelmingly negative response to the Fed decision to print up $600B to buy bonds is intensifying as Russia and China joined European nations in slamming the move. This report explains:

Mr. Obama returned fire in the growing confrontation over trade and currencies Monday in a joint news conference with Indian Prime Minister Manmohan Singh, taking the unusual step of publicly backing the Fed’s decision to buy $600 billion in U.S. Treasury bonds—a move that has come under withering international criticism for weakening the U.S. dollar.

Gold topped $1,400 an ounce on fears of inflation as investors voted thumbs down on Ben Bernanke’s plan. And the number of critics is growing, leaving the U.S. isolated:

Germany’s criticism echoes that from other countries, including Brazil and Japan, which have complained about potential spillover from the Fed’s action. Printing more dollars, or cutting U.S. interest rates, tends to weaken the dollar and makes U.S. exports more attractive. The accompanying rise in the value of other countries’ currencies tends to damp their exports and can fuel inflation or asset bubbles, as emerging-market officials note. U.S. officials maintain the Fed’s action is about stimulating domestic demand, and that a weaker dollar is a consequence, not an objective.

On Monday, China’s Vice Finance Minister Zhu Guangyao said the U.S. isn’t living up to its responsibility as an issuer of a global reserve currency. …

The top economic aide to Russian President Dmitry Medvedev said Russia will insist at the G-20 summit that the Fed consult with other countries ahead of major policy decisions.

Luxembourg Prime Minister Jean-Claude Juncker, who is chairman of the euro-zone finance ministers, also weighed in on the Fed move, saying: “I don’t think it’s a good decision. You’re fighting debt with more debt.”

These concerns are entirely justified. Moreover, one can’t help but appreciate the irony: the “cowboy” George W. Bush was lambasted for “going it alone” and making the U.S. a pariah in the world. But worldwide resentment over the U.S. is surging as Obama is forced to lamely defend his moves as “pro-growth” (which speaks volumes about the administration’s economic illiteracy, for not even his defenders would claim that currency devaluation=growth). We hear that the “blunt criticism of U.S. policy is in large part payback for a longstanding stance by Washington policy makers that the American economy should serve as a model for others. The heated rhetoric also stems from fears that the U.S. may be looking for a back-door way to set exchange-rate policy in a way that favors the U.S.”

Combined with the incessant shin-kicking of our allies (e.g., Eastern Europe, Israel, Honduras, Britain), this latest move certainly strengthens Obama’s critics here and abroad. They contend that through a combination of ill-conceived policies and rank incompetence, Obama is rendering the U.S. less influential and less respected, which is increasing instability in the world. All and all, it is a textbook example of the perils of deploying liberal statism at home and shrinking America’s stature overseas. Unfortunately, this is not a graduate course at Harvard or a symposium at the New America Foundation. It is all too real, and unless we arrest the panoply of bad policies, America and its allies will be poorer and less safe. We already are.

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How Will the GOP Be Able to Influence Foreign Policy After the Election?

With the GOP poised to take at least one house of Congress, there is already much speculation about what this portends for policy. I will leave domestic policy to colleagues who follow it more closely than I do. When it comes to foreign and defense policy, my instinct is that there isn’t much change in the works.

In the first place, national-security policy is an area of almost unbounded presidential prerogative. Most of the time Congress can exert an influence only at the margins. Only if things really get off-kilter can Congress have a major impact, as it did in the early 1970s, when antiwar lawmakers cut off South Vietnam and severely hobbled our defense and intelligence establishments. But that was after Watergate and a military defeat (or so it was perceived at the time — debate about whether we really “lost” in Vietnam continues). Such circumstances seldom recur; no chief executive has been as weak as Nixon and Ford. In the 1980s, to be sure, Congress was a significant player in trying to limit aid to the Sandinistas and some other aspects of the Reagan approach to winning the Cold War — but that was a much more ideologically polarizing period in foreign policy than the one we’re in today.

As I noted recently, there is a surprisingly large degree of bipartisan consensus on the war on terror now that Obama has essentially endorsed most of Bush’s approach. That extends to other areas, including the most controversial foreign-policy issue of the day — the Afghan War. Republicans are actually more behind the war effort than Democrats, so it will be easy for Obama to reach across the aisle and seek and win the support of Mitch McConnell, John Boehner, and other Republican leaders on the Hill. Some Tea Party isolationists (Rand Paul comes to mind) will object but they will be fringe players — unless the war goes seriously south. The most immediate impact of GOP majorities would presumably be to take the pressure off Obama to stick by his July 2011 deadline for beginning a withdrawal, but, as I’ve previously noted, I think the president has backed off the deadline as it is. Republicans may also pressure Obama to get tougher on Iran and less tough on Israel, but their leverage is going to be severely limited.

The most significant changes are likely to be not those imposed on Obama from the Hill but those he has decided to make himself based on two years of on-the-job experience. As Robert Kagan recently argued, there are some signs to indicate that Obama’s foreign policy has already entered a new phase:

If Phase One was about repairing America’s image around the world by showing a friendlier face to everyone, especially adversaries, Phase Two will be about wielding renewed American influence, even if it means challenging some and disappointing others. If Phase One was about “resetting” relations with great powers, especially Russia and China, Phase Two will be about discovering the limits of reset and taking a harder line when we disagree. If Phase One placed more emphasis on great-power cooperation and the nebulous concept of a “G-20 world,” Phase Two will be built around core U.S. alliances with democratic nations. If Phase One was focused on being Not Bush, Phase Two will be about shedding that self-imposed straitjacket and pursuing traditional American interests and principles even if George W. Bush pursued them, too.

I think that’s basically right. Obama came into office with little foreign-policy experience and lots of ideological baggage. (Remember his infamous pledge to meet during his first year in office with the leaders of “Iran, Syria, Venezuela, Cuba and North Korea”? Another campaign promise thankfully not kept.) He has been learning the hard way that his personal charm is not going to transform the world — that the mullahs, for instance, will want nuclear weapons no matter who is in the White House. He is now making some welcome course adjustments. Republicans on the Hill can support some of his initiatives and stymie others but ultimately they are not going to have a decisive impact on the course set by the commander in chief.

With the GOP poised to take at least one house of Congress, there is already much speculation about what this portends for policy. I will leave domestic policy to colleagues who follow it more closely than I do. When it comes to foreign and defense policy, my instinct is that there isn’t much change in the works.

In the first place, national-security policy is an area of almost unbounded presidential prerogative. Most of the time Congress can exert an influence only at the margins. Only if things really get off-kilter can Congress have a major impact, as it did in the early 1970s, when antiwar lawmakers cut off South Vietnam and severely hobbled our defense and intelligence establishments. But that was after Watergate and a military defeat (or so it was perceived at the time — debate about whether we really “lost” in Vietnam continues). Such circumstances seldom recur; no chief executive has been as weak as Nixon and Ford. In the 1980s, to be sure, Congress was a significant player in trying to limit aid to the Sandinistas and some other aspects of the Reagan approach to winning the Cold War — but that was a much more ideologically polarizing period in foreign policy than the one we’re in today.

As I noted recently, there is a surprisingly large degree of bipartisan consensus on the war on terror now that Obama has essentially endorsed most of Bush’s approach. That extends to other areas, including the most controversial foreign-policy issue of the day — the Afghan War. Republicans are actually more behind the war effort than Democrats, so it will be easy for Obama to reach across the aisle and seek and win the support of Mitch McConnell, John Boehner, and other Republican leaders on the Hill. Some Tea Party isolationists (Rand Paul comes to mind) will object but they will be fringe players — unless the war goes seriously south. The most immediate impact of GOP majorities would presumably be to take the pressure off Obama to stick by his July 2011 deadline for beginning a withdrawal, but, as I’ve previously noted, I think the president has backed off the deadline as it is. Republicans may also pressure Obama to get tougher on Iran and less tough on Israel, but their leverage is going to be severely limited.

The most significant changes are likely to be not those imposed on Obama from the Hill but those he has decided to make himself based on two years of on-the-job experience. As Robert Kagan recently argued, there are some signs to indicate that Obama’s foreign policy has already entered a new phase:

If Phase One was about repairing America’s image around the world by showing a friendlier face to everyone, especially adversaries, Phase Two will be about wielding renewed American influence, even if it means challenging some and disappointing others. If Phase One was about “resetting” relations with great powers, especially Russia and China, Phase Two will be about discovering the limits of reset and taking a harder line when we disagree. If Phase One placed more emphasis on great-power cooperation and the nebulous concept of a “G-20 world,” Phase Two will be built around core U.S. alliances with democratic nations. If Phase One was focused on being Not Bush, Phase Two will be about shedding that self-imposed straitjacket and pursuing traditional American interests and principles even if George W. Bush pursued them, too.

I think that’s basically right. Obama came into office with little foreign-policy experience and lots of ideological baggage. (Remember his infamous pledge to meet during his first year in office with the leaders of “Iran, Syria, Venezuela, Cuba and North Korea”? Another campaign promise thankfully not kept.) He has been learning the hard way that his personal charm is not going to transform the world — that the mullahs, for instance, will want nuclear weapons no matter who is in the White House. He is now making some welcome course adjustments. Republicans on the Hill can support some of his initiatives and stymie others but ultimately they are not going to have a decisive impact on the course set by the commander in chief.

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S-300: Political Football

Americans looking for coherence in Russia’s on-again, off-again policy on the S-300 sale to Iran should focus on the overall thrust of Russian policy in the Putin era. Putin’s emphasis — with interstitial refinements from Dmitry Medvedev — is on supplanting American leadership with a set of multilateral bodies and rivalries in which Russia can wield increasing influence.

As with many of Putin’s foreign-policy moves, the S-300 sale is a tool for putting Russia at the center of a major decision point about international security. The prospect of the sale has given Europe, Asia, and the U.S. a reason to seek Russian cooperation. It has also given Russia an influence over Iran that no other nation has had in the past half-decade. This is related, in turn, to the trigger the sale has put in Russia’s hands: from any objective military analysis, the delivery of the S-300 to Iran would set the clock ticking on Israel’s window of feasibility for attacking the Iranian nuclear sites.

Russia wouldn’t let this valuable bargaining chip go for light and transient reasons. Everything in his history must tell us that Putin is letting go of this uniquely privileged position because he has what he wants: he doesn’t feel he needs the power of that particular position for the time being. If he wants it back, he can probably get it (unless China steps into the breach and sells its version of the S-300 to Iran instead). Meanwhile, cancelling the sale is a signal that Putin is satisfied with the benefits his policies have realized, to date, from Russian influence with Iran.

What benefits has he realized? In brief, he has succeeded in getting America’s closest allies to seek accommodation with Russia as a means of improving their position vis-à-vis Iran. I’ve written here and here, for example, about the Netanyahu government’s pragmatic outreach to Moscow, which recently produced a defense-cooperation agreement that would have been unthinkable even two years ago.

Equally significant is the September announcement by NATO’s political chief, Anders Fogh Rasmussen, that NATO’s future lies in structured cooperation with Russia on security issues, including missile defense. In the wake of that proclamation, France and Germany will hold a summit with Russia in October in preparation for the next G-20 conference. Their main topic will reportedly be “joint security issues.”

It cannot be reiterated too often that incorporating Russia in Europe’s missile defenses will give Russia an effective veto over anything it doesn’t like about those defenses. It will also give Moscow a means of dividing Europe from North America over the nature and purpose of our common defense arrangements. Assuming these incipient efforts move forward as proposed — all while Russia keeps missiles trained on Eastern Europe — it’s not too much to say that we will be witnessing the death throes of the NATO alliance.

These are heady achievements for Putin’s policies, but they’re not the only ones. Russia has succeeded in ingratiating itself with India to a much greater extent in the last 18 months, increasing arms cooperation dramatically and establishing itself as a partner in containing the Taliban. In all of these cases, a narrowly-focused and expedient passivity on the part of the U.S has smoothed Russia’s path. President Obama himself created the conditions for Russia to act as a spoiler in NATO missile defenses, by abandoning the installations planned for Eastern Europe and rushing into the ill-considered New START treaty. And his dilatory approach to Iran has been a key factor in driving the nations of the Eastern hemisphere to look to Russia for help, rather than counting on the U.S. to avert the security catastrophe of a nuclear-armed Iran.

It would actually be a better sign, at this point, if Putin still thought the S-300 sale was an indispensable bargaining chip. It would mean he still considered it necessary to leverage such a chip against U.S. power. But he no longer does — and that doesn’t mean he has changed. It means we have.

Americans looking for coherence in Russia’s on-again, off-again policy on the S-300 sale to Iran should focus on the overall thrust of Russian policy in the Putin era. Putin’s emphasis — with interstitial refinements from Dmitry Medvedev — is on supplanting American leadership with a set of multilateral bodies and rivalries in which Russia can wield increasing influence.

As with many of Putin’s foreign-policy moves, the S-300 sale is a tool for putting Russia at the center of a major decision point about international security. The prospect of the sale has given Europe, Asia, and the U.S. a reason to seek Russian cooperation. It has also given Russia an influence over Iran that no other nation has had in the past half-decade. This is related, in turn, to the trigger the sale has put in Russia’s hands: from any objective military analysis, the delivery of the S-300 to Iran would set the clock ticking on Israel’s window of feasibility for attacking the Iranian nuclear sites.

Russia wouldn’t let this valuable bargaining chip go for light and transient reasons. Everything in his history must tell us that Putin is letting go of this uniquely privileged position because he has what he wants: he doesn’t feel he needs the power of that particular position for the time being. If he wants it back, he can probably get it (unless China steps into the breach and sells its version of the S-300 to Iran instead). Meanwhile, cancelling the sale is a signal that Putin is satisfied with the benefits his policies have realized, to date, from Russian influence with Iran.

What benefits has he realized? In brief, he has succeeded in getting America’s closest allies to seek accommodation with Russia as a means of improving their position vis-à-vis Iran. I’ve written here and here, for example, about the Netanyahu government’s pragmatic outreach to Moscow, which recently produced a defense-cooperation agreement that would have been unthinkable even two years ago.

Equally significant is the September announcement by NATO’s political chief, Anders Fogh Rasmussen, that NATO’s future lies in structured cooperation with Russia on security issues, including missile defense. In the wake of that proclamation, France and Germany will hold a summit with Russia in October in preparation for the next G-20 conference. Their main topic will reportedly be “joint security issues.”

It cannot be reiterated too often that incorporating Russia in Europe’s missile defenses will give Russia an effective veto over anything it doesn’t like about those defenses. It will also give Moscow a means of dividing Europe from North America over the nature and purpose of our common defense arrangements. Assuming these incipient efforts move forward as proposed — all while Russia keeps missiles trained on Eastern Europe — it’s not too much to say that we will be witnessing the death throes of the NATO alliance.

These are heady achievements for Putin’s policies, but they’re not the only ones. Russia has succeeded in ingratiating itself with India to a much greater extent in the last 18 months, increasing arms cooperation dramatically and establishing itself as a partner in containing the Taliban. In all of these cases, a narrowly-focused and expedient passivity on the part of the U.S has smoothed Russia’s path. President Obama himself created the conditions for Russia to act as a spoiler in NATO missile defenses, by abandoning the installations planned for Eastern Europe and rushing into the ill-considered New START treaty. And his dilatory approach to Iran has been a key factor in driving the nations of the Eastern hemisphere to look to Russia for help, rather than counting on the U.S. to avert the security catastrophe of a nuclear-armed Iran.

It would actually be a better sign, at this point, if Putin still thought the S-300 sale was an indispensable bargaining chip. It would mean he still considered it necessary to leverage such a chip against U.S. power. But he no longer does — and that doesn’t mean he has changed. It means we have.

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Flotsam and Jetsam

But they are supposed to go into harm’s way for their country: the Navy takes away the lard and water hoses from a 60-year tradition in which plebes climb a greased 21-foot monument. Why? They might get hurt. A former Naval Academy graduate chimes in: “We’re going to send these guys to war but they can’t climb a monument because they might get hurt? Come on.” Next thing you know, they’ll be allowing proper names in Scrabble.

But don’t we have a First Amendment or something? “Former Alaska Gov. Sarah Palin accused the president of being in the pocket of Big Oil, a charge usually leveled by Democrats at the GOP. ‘You’ve got to have a license to drive a car in this country, but, regrettably, you can get on a TV show and say virtually anything,’ White House press secretary Robert Gibbs said.” Gosh, if we only licensed talking heads.

But he’s a “genius”! “Millions of Americans are out of work, the budget deficit is in the trillions and Europe is flirting with economic collapse. Fear not, says Larry Summers, the chief economic adviser to President Obama. It is merely a ‘fluctuation.’” His long-winded gobbledygook about moving from the G-7 to the G-20 “was vintage Summers: smart, esoteric — and utterly unhelpful.”

But isn’t it like allowing Keith Olbermann to review a George W. Bush biography? The Washington Post has David Frum (who’s carved out a niche in Limbaugh-bashing for the mainstream media) review the latest biography of Rush Limbaugh. Surprise, surprise, he concludes: “It might seem ominous for an intellectual movement to be led by a man who does not think creatively, who does not respect the other side of the argument and who frequently says things that are not intended as truth.”

But you didn’t really buy all that “transparency” jazz did you? “The Justice Department has rejected a Republican request to appoint a special counsel to investigate allegations that the White House offered a job to Rep. Joe Sestak if he would drop out of the Pennsylvania Senate Democratic primary. … In the letter to [Rep. Darrell] Issa, Assistant Attorney General Ronald Weich wrote that the DOJ could handle the allegations without creating a special counsel. But Weich gave no indication that the department was looking into the Sestak matter.”

But if David Axelrod is right about there being “no evidence” of a deal, then Sestak is lying. Mark Hemingway: “There’s no good outcome here for the White House. Either the White House did something illegal here or their party’s Senate candidate in Pennsylvania is a delusional fabulist. But regardless, their prolonged foot-dragging here only appears to be making things worse.”

But the White House said, “Trust us”: “The number two Democrat in the Senate, who has close ties to the White House, is urging Rep. Joe Sestak to come clean. Senate Majority Whip Dick Durbin told CNN Tuesday that the Pennsylvania Democrat should fully explain whether Obama administration officials pressed him to drop his Democratic primary challenge to Sen. Arlen Specter in exchange for a job.”

But Democrats insisted we needed a humungous new uber-department! James Carafano on the BP response: “Explain to me why nine years after 9/11 we struggle with disasters. Well, the answer is easy. Homeland Security wastes its time on routine disaster; the secretary worries more about how to grant amnesty to illegals than battling terrorists and preparing for catastrophes. Congress dumps money in wasteful programs and uses 108 committees, sub-committees, and commissions to provide chaotic and incoherent oversight to the department.”

But (as a sharp colleague suggested) couldn’t we work out a deal where Richard Blumenthal and Rand Paul both exit their races? Jonah Goldberg sums up why conservatives should carry no water for Paul: “[I]t’s certainly repugnant and bizarre for libertarians like Paul to lament the lost rights of bigots rather than to rejoice at the restored rights of integrationists.” (By the way, would Paul commend Obama for doing nothing at all about the BP spill?)

But they are supposed to go into harm’s way for their country: the Navy takes away the lard and water hoses from a 60-year tradition in which plebes climb a greased 21-foot monument. Why? They might get hurt. A former Naval Academy graduate chimes in: “We’re going to send these guys to war but they can’t climb a monument because they might get hurt? Come on.” Next thing you know, they’ll be allowing proper names in Scrabble.

But don’t we have a First Amendment or something? “Former Alaska Gov. Sarah Palin accused the president of being in the pocket of Big Oil, a charge usually leveled by Democrats at the GOP. ‘You’ve got to have a license to drive a car in this country, but, regrettably, you can get on a TV show and say virtually anything,’ White House press secretary Robert Gibbs said.” Gosh, if we only licensed talking heads.

But he’s a “genius”! “Millions of Americans are out of work, the budget deficit is in the trillions and Europe is flirting with economic collapse. Fear not, says Larry Summers, the chief economic adviser to President Obama. It is merely a ‘fluctuation.’” His long-winded gobbledygook about moving from the G-7 to the G-20 “was vintage Summers: smart, esoteric — and utterly unhelpful.”

But isn’t it like allowing Keith Olbermann to review a George W. Bush biography? The Washington Post has David Frum (who’s carved out a niche in Limbaugh-bashing for the mainstream media) review the latest biography of Rush Limbaugh. Surprise, surprise, he concludes: “It might seem ominous for an intellectual movement to be led by a man who does not think creatively, who does not respect the other side of the argument and who frequently says things that are not intended as truth.”

But you didn’t really buy all that “transparency” jazz did you? “The Justice Department has rejected a Republican request to appoint a special counsel to investigate allegations that the White House offered a job to Rep. Joe Sestak if he would drop out of the Pennsylvania Senate Democratic primary. … In the letter to [Rep. Darrell] Issa, Assistant Attorney General Ronald Weich wrote that the DOJ could handle the allegations without creating a special counsel. But Weich gave no indication that the department was looking into the Sestak matter.”

But if David Axelrod is right about there being “no evidence” of a deal, then Sestak is lying. Mark Hemingway: “There’s no good outcome here for the White House. Either the White House did something illegal here or their party’s Senate candidate in Pennsylvania is a delusional fabulist. But regardless, their prolonged foot-dragging here only appears to be making things worse.”

But the White House said, “Trust us”: “The number two Democrat in the Senate, who has close ties to the White House, is urging Rep. Joe Sestak to come clean. Senate Majority Whip Dick Durbin told CNN Tuesday that the Pennsylvania Democrat should fully explain whether Obama administration officials pressed him to drop his Democratic primary challenge to Sen. Arlen Specter in exchange for a job.”

But Democrats insisted we needed a humungous new uber-department! James Carafano on the BP response: “Explain to me why nine years after 9/11 we struggle with disasters. Well, the answer is easy. Homeland Security wastes its time on routine disaster; the secretary worries more about how to grant amnesty to illegals than battling terrorists and preparing for catastrophes. Congress dumps money in wasteful programs and uses 108 committees, sub-committees, and commissions to provide chaotic and incoherent oversight to the department.”

But (as a sharp colleague suggested) couldn’t we work out a deal where Richard Blumenthal and Rand Paul both exit their races? Jonah Goldberg sums up why conservatives should carry no water for Paul: “[I]t’s certainly repugnant and bizarre for libertarians like Paul to lament the lost rights of bigots rather than to rejoice at the restored rights of integrationists.” (By the way, would Paul commend Obama for doing nothing at all about the BP spill?)

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The Best Available Defense of Obama’s Foreign Policy

I got a call the other day from a reporter from the New York Times Magazine doing a retrospective article on the first year of Obama’s foreign policy. He wanted to know what fruit the president’s attempts at “outreach” had borne. My instinctive reaction was: Obama’s stress on diplomacy has not produced any payoff yet. If anything, it has reduced American standing in the world by alarming our friends (notably Eastern Europe and Israel) and earning the scorn of our enemies (North Korea, Iran, and others). There seems to be bipartisan agreement that some of the president’s policies — e.g., on the Israeli-Palestinian peace process — have been disastrous. To the extent that he has done things right, it is largely a matter of continuing and expanding on the previous president’s policies in Afghanistan and Iraq.

This was greeted with a slightly incredulous noise by my interlocutor. Clearly he was skeptical, as you would expect a writer for the Times to be. So I asked him whether anyone has a contrary viewpoint. Are there serious analysts who can point to a substantive payoff from the president’s policies? He referred me to this essay by Jessica Matthews of the Carnegie Endowment for International Peace. Having read it, I am wondering if this is the best that the president’s supporters can muster on his behalf.

Matthews writes: “From his campaign address in Berlin to the path-breaking nuclear policy speech in Prague to the high risk venture in Cairo and the Nowruz message to Iran, the President succeeded in a remarkably short time in turning from dark to light how the world sees the United States.” There is some support for this impression from the Pew poll, which did find Obama’s ascent in improving opinions of the United States in Western Europe and some other places (there was a big bump in Indonesia where Obama spent part of this childhood). But it also found a small slippage in support for the U.S. in Israel, Poland, Pakistan, and Russia, while the gains in the Palestinian territory (up to 15% percent approval from 13 percent in 2007), Turkey (14 percent, up from 12 percent in 2008), Egypt (27 percent, up from 22 percent), and Jordan (25 percent, up from 19 percent) are small and still leave the U.S. mired in deep unpopularity.

The larger question is how Obama can translate greater popularity into greater achievements in safeguarding American security. Matthews thinks he has already done it, but she has to really stretch to make her case. She claims, for instance, that Obama deserves credit for the “establishment of the G-20 as a badly needed new instrument for such cooperation, bringing to the table economic powerhouses excluded from the G-8.” And what exactly will those “economic powerhouses” accomplish, other than holding fabulous meetings? That is unclear.

She also claims that Obama has established a “working relationship” with Russia but has to admit “it remains to be seen how the U.S.-Russia relationship will evolve—especially whether Moscow will do what it must do vis-à-vis Iran to retain credibility as a responsible international actor.” In fact, so far, Russia hasn’t given much reason to think it will be willing to crack down on the Iranian nuclear program. It may agree to a new START treaty, but so what? Reducing nuclear arms is more in the Russian interest than in ours because they can’t afford to maintain their arsenal.

Matthews claims that Obama “has also gone a long way toward reversing the world’s view of whether Washington or Tehran has the better argument in its favor on the crucial nuclear issue,” but there was never much question that most other nations — especially in Europe and the Middle East — sided with Washington’s concerns. The question has always been what they are prepared to do about it. Are they prepared to sacrifice economic self-interest to impose really tough sanctions on Iran? So far there has been no real movement in this direction, while the Iranian nuclear program has been going full-speed ahead.

I am by no means suggesting that the Obama foreign policy is already a failure. It is too early to tell. But certainly it has been hard to point to any substantive achievements of his first year in office. His efforts to reach out to Iran and North Korea, while ignoring their egregious human-rights violations, have been met with humiliating rejection. His Oslo speech suggested that he may be getting a little more tough-minded, as did his decision to send reinforcements to Afghanistan. Perhaps the second year will be better than his first — but that’s a low hurdle to get over.

I got a call the other day from a reporter from the New York Times Magazine doing a retrospective article on the first year of Obama’s foreign policy. He wanted to know what fruit the president’s attempts at “outreach” had borne. My instinctive reaction was: Obama’s stress on diplomacy has not produced any payoff yet. If anything, it has reduced American standing in the world by alarming our friends (notably Eastern Europe and Israel) and earning the scorn of our enemies (North Korea, Iran, and others). There seems to be bipartisan agreement that some of the president’s policies — e.g., on the Israeli-Palestinian peace process — have been disastrous. To the extent that he has done things right, it is largely a matter of continuing and expanding on the previous president’s policies in Afghanistan and Iraq.

This was greeted with a slightly incredulous noise by my interlocutor. Clearly he was skeptical, as you would expect a writer for the Times to be. So I asked him whether anyone has a contrary viewpoint. Are there serious analysts who can point to a substantive payoff from the president’s policies? He referred me to this essay by Jessica Matthews of the Carnegie Endowment for International Peace. Having read it, I am wondering if this is the best that the president’s supporters can muster on his behalf.

Matthews writes: “From his campaign address in Berlin to the path-breaking nuclear policy speech in Prague to the high risk venture in Cairo and the Nowruz message to Iran, the President succeeded in a remarkably short time in turning from dark to light how the world sees the United States.” There is some support for this impression from the Pew poll, which did find Obama’s ascent in improving opinions of the United States in Western Europe and some other places (there was a big bump in Indonesia where Obama spent part of this childhood). But it also found a small slippage in support for the U.S. in Israel, Poland, Pakistan, and Russia, while the gains in the Palestinian territory (up to 15% percent approval from 13 percent in 2007), Turkey (14 percent, up from 12 percent in 2008), Egypt (27 percent, up from 22 percent), and Jordan (25 percent, up from 19 percent) are small and still leave the U.S. mired in deep unpopularity.

The larger question is how Obama can translate greater popularity into greater achievements in safeguarding American security. Matthews thinks he has already done it, but she has to really stretch to make her case. She claims, for instance, that Obama deserves credit for the “establishment of the G-20 as a badly needed new instrument for such cooperation, bringing to the table economic powerhouses excluded from the G-8.” And what exactly will those “economic powerhouses” accomplish, other than holding fabulous meetings? That is unclear.

She also claims that Obama has established a “working relationship” with Russia but has to admit “it remains to be seen how the U.S.-Russia relationship will evolve—especially whether Moscow will do what it must do vis-à-vis Iran to retain credibility as a responsible international actor.” In fact, so far, Russia hasn’t given much reason to think it will be willing to crack down on the Iranian nuclear program. It may agree to a new START treaty, but so what? Reducing nuclear arms is more in the Russian interest than in ours because they can’t afford to maintain their arsenal.

Matthews claims that Obama “has also gone a long way toward reversing the world’s view of whether Washington or Tehran has the better argument in its favor on the crucial nuclear issue,” but there was never much question that most other nations — especially in Europe and the Middle East — sided with Washington’s concerns. The question has always been what they are prepared to do about it. Are they prepared to sacrifice economic self-interest to impose really tough sanctions on Iran? So far there has been no real movement in this direction, while the Iranian nuclear program has been going full-speed ahead.

I am by no means suggesting that the Obama foreign policy is already a failure. It is too early to tell. But certainly it has been hard to point to any substantive achievements of his first year in office. His efforts to reach out to Iran and North Korea, while ignoring their egregious human-rights violations, have been met with humiliating rejection. His Oslo speech suggested that he may be getting a little more tough-minded, as did his decision to send reinforcements to Afghanistan. Perhaps the second year will be better than his first — but that’s a low hurdle to get over.

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A Warning for Paulson

Treasury Secretary Henry Paulson, traveling yesterday in Africa, acknowledged the support of the G-20 nations for a “best practices” code for sovereign wealth funds. There could now be as much as $3 trillion in such vehicles, which are capital pools accumulated by foreign governments for investment abroad. The amount might be five times larger in half a decade.

“How do we actually deal with funds in state hands?” asks German Chancellor Angela Merkel. Her government is already drawing up plans to restrict investments from other countries. Paulson, on the other hand, has adopted a different approach. “I’d like nothing more than to get more of that money,” he said recently.

Do we really want to encourage what amounts to the “cross-border nationalization” of America’s private enterprises? Norway has a sovereign wealth fund thanks to its oil and gas revenues, but nobody is concerned about Oslo’s $350 billion because of its model management practices. Yet even the Norwegians have allowed political views to affect their investment decisions. They did not like Wal-Mart’s union and other labor practices, so the government divested its stock in the gigantic retailer. They did not try to influence Washington by buying up more of the shares so that they could use the Arkansas-based company to promote its views on, say, the war in Iraq.

Hugo Chavez hasn’t gone quite that far. But he has employed Citgo Petroleum to further his ideological goals. Beginning in 2005, the company, acquired by Venezuela two decades ago, has provided tens of millions of gallons of home heating oil at subsidized prices for poor families in several Northeast states as a stunt to embarrass the United States, and especially the Bush administration. Moreover, he has been gutting Citgo’s operations in the United States to support his “oil socialism” policies at home. As the Wall Street Journal reported on Friday, political decisions made in Caracas are ruining the company’s business here. That’s a potential problem because Citgo, which is now run like a police state, owns 5 percent of our nation’s refining capacity. Chavez, should he want to, could throw the American oil market into turmoil merely by turning off the switch.

Our open investment policies are based on the notion that America will prosper as foreign parties participate in the economy. Yet Chavez is beginning to undermine this fundamental assumption, and he is giving no indication that Paulson’s best practices code will deter him. When despots control trillions of dollars in funds, prohibiting investments from autocrats is not protectionist—it’s plain common sense.

Treasury Secretary Henry Paulson, traveling yesterday in Africa, acknowledged the support of the G-20 nations for a “best practices” code for sovereign wealth funds. There could now be as much as $3 trillion in such vehicles, which are capital pools accumulated by foreign governments for investment abroad. The amount might be five times larger in half a decade.

“How do we actually deal with funds in state hands?” asks German Chancellor Angela Merkel. Her government is already drawing up plans to restrict investments from other countries. Paulson, on the other hand, has adopted a different approach. “I’d like nothing more than to get more of that money,” he said recently.

Do we really want to encourage what amounts to the “cross-border nationalization” of America’s private enterprises? Norway has a sovereign wealth fund thanks to its oil and gas revenues, but nobody is concerned about Oslo’s $350 billion because of its model management practices. Yet even the Norwegians have allowed political views to affect their investment decisions. They did not like Wal-Mart’s union and other labor practices, so the government divested its stock in the gigantic retailer. They did not try to influence Washington by buying up more of the shares so that they could use the Arkansas-based company to promote its views on, say, the war in Iraq.

Hugo Chavez hasn’t gone quite that far. But he has employed Citgo Petroleum to further his ideological goals. Beginning in 2005, the company, acquired by Venezuela two decades ago, has provided tens of millions of gallons of home heating oil at subsidized prices for poor families in several Northeast states as a stunt to embarrass the United States, and especially the Bush administration. Moreover, he has been gutting Citgo’s operations in the United States to support his “oil socialism” policies at home. As the Wall Street Journal reported on Friday, political decisions made in Caracas are ruining the company’s business here. That’s a potential problem because Citgo, which is now run like a police state, owns 5 percent of our nation’s refining capacity. Chavez, should he want to, could throw the American oil market into turmoil merely by turning off the switch.

Our open investment policies are based on the notion that America will prosper as foreign parties participate in the economy. Yet Chavez is beginning to undermine this fundamental assumption, and he is giving no indication that Paulson’s best practices code will deter him. When despots control trillions of dollars in funds, prohibiting investments from autocrats is not protectionist—it’s plain common sense.

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