Lamenting Lewinsky (Again)

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Historians oscillate between interpretations of past events as the consequence of either great men or grand forces. Rarely are historians inclined to reduce the course of history to singular events and when they do, the conclusion is justifiable only on the basis of extraordinary circumstances. Assassinations such as Lincoln, Franz Ferdinand, and Kennedy qualify; affairs and dalliances do not. Next month marks the fifteenth anniversary of the Monica Lewinsky scandal. The revelations of President William Clinton's extramarital affair with White House intern Monica Lewinsky in January 1998 upended the political scene and consumed the nation's attention for a year. Instead of resigning, President Clinton subjected the nation to a torrent of salacious rumors, exposés, investigations, prime time confessions, and ultimately his impeachment and acquittal one year later. In retrospect, however, the Lewinsky scandal, while permanently blemishing his record, has been deemed immaterial to the broader course of American history. The triumphs of the Clinton era -- the bipartisan budget deals, a roaring economy, trillion-dollar surpluses -- are well remembered, especially in the present day as the economy staggers toward the fiscal cliff. The anniversary will come and go, but its occurrence will hardly be characterized as momentous. Or should it?

Entitlement Reform

In July 1997, then Federal Reserve Chairman Alan Greenspan testified America's recent economic performance had been "exceptional." Greenspan noted the economy had achieved a six percent growth rate and had just marked the seventh year of expansion, making it third longest post-World War II upswing to date.

The next month, President Clinton signed legislation ratifying an agreement concluded with his arch-nemesis, Speaker Newt Gingrich, and the Republican Congress the previous May. The agreement set a schedule for balanced budgets by 2002, lower domestic spending levels, and tax reductions. The coincidence of a booming economy and a nascent political truce inspired confidence throughout the country.

With short-term deficits addressed and major budget surpluses now possible, the history-changing prospect of tackling the more challenging matter of long-term structural deficits -- those arising from Social Security and Medicare -- enticed Clinton and Gingrich.

As superbly recounted by American historian Steven Gillon in The Pact, the president and the speaker met secretly in October 1997 and agreed to form a coalition designed to achieve entitlement reform.

After an acrimonious three years of political combat marked by congressional investigations, government shutdowns, and countless attack ads, the two men agreed the long-term interests of the country demanded a compromise (and would, of course, also enhance their legacies). Both had collaborated successfully in the past, both had just earned re-election, and lastly, as Gillon noted, both had developed a personal chemistry that defied their public posturing and mystified their colleagues.

To reform Social Security, each men conceded important points. The president agreed to support an increase in the age of eligibility as well as a change to the formula to calculate the annual cost of living adjustment; the speaker agreed to devote anticipated budget surpluses to fully fund Social Security. The former promised to arouse massive opposition from labor and senior citizens -- two key components of President Clinton's political base. The latter contravened the Republican conference's preference to lower taxes and could have sparked a second (and probably successful) attempt to oust Gingrich from the speakership. The two men agreed the country's future was worth the risks and agreed to forge a majority to support the compromise.

The deadline for devising a requisite strategy would be the President's State of the Union address the following January 27th.

On January 17, the website Drudge Report reported that President Clinton had a relationship with Monica Lewinsky. On January 21, the Washington Post reported the president was being investigated by an independent prosecutor for encouraging Lewinsky to lie under oath if asked about the relationship.

The revelations rocked the country and the demand for a comprehensive explanation from the president was overwhelming. The day before his State of the Union, the president held a press conference and stated unequivocally, "I did not have sexual relations with that woman, Miss Lewinsky. I never told anybody to lie, not a single time; never. These allegations are false." Despite the assurance (or perhaps because of it), the president's opponents insisted on a complete investigation.

In July, Lewinsky received transactional immunity in exchange for testimony and evidence confirming her relationship with Clinton. In August, the president publicly admitted to the relationship in an address to the nation.

In November, the Republican Party lost five seats but retained control of the Congress in the off-year elections; Gingrich, who had projected substantial gains, immediately announced his resignation.

In December, the House voted for articles of impeachment against Clinton. On February 12, 1999, the Senate voted to acquit Clinton, permitting him to complete his term in office.

Instead of announcing a grand compromise to reform entitlements during his State of the Union, the president's evasion the day before foreclosed that opportunity permanently.  The occasion for meaningful change had passed. 

In an interview with Gillon, Gingrich commented, "[t]here is no question in my mind in October of 1997, that we were looking forward to a period where we would cooperate on a broad range of really big issues." Gillon quoted Erskine Bowles, Clinton's White House Chief of Staff at the time and a participant to the meeting, who said, "Monica changed everything. There were real opportunity costs -- we had so much planned for 1998."

Gillon noted both men were confident that their coalition would rival the New Deal and the Great Society in terms of the significance of legislation enacted.  Gillon concluded "the Clinton years were a period of missed opportunities. ... During that unique period of peace and prosperity, the nation had an unprecedented chance to tackle important domestic issues."

The emphasis on domestic in the preceding quote has been added. 

The Pact is a comprehensive examination of the political era dominated by Clinton and Gingrich, but its conclusions did not extend to the realm of national security. During the Nineties, America was essentially between wars and the imperative for vigilance overseas ebbed. Indeed, the ellipsis in the preceding quote replaced the following words: "A brief ten-year window separated the end of the Cold War and the dawn of the new age of global terror."

Perhaps Gillon concluded the harm from the Lewinsky scandal was limited only to the domestic matters. Gillon would be justified in concluding so; no major power threatened America in the Nineties, and in 1999, the aerial bombing campaign against Serbia ended without a single casualty. In August 1999, the United States Commission on National Security/21st Century (established by Gingrich) concluded a global competitor to the United States was unlikely to rise over the next twenty-five years.

A year later, however, the Commission acknowledged that the future would be marked by contradictory forces of integration and fragmentation and that identifying specific threats would be a challenge. More pointedly, the Commission warned "Americans are less secure than they believe themselves to be."

The reason? America had failed to adapt its national security institutions and military capabilities during this rare "unipolar moment."

Not that the proposal wasn't made though.

Transformation

As comprehensively revisited by American analyst Ricardo A. Marquez in "Transformation Achieved?", in the late Nineties a small team of defense and military experts did examine potential future challenges and argued for a "transformation" of America's approach to national security.

The National Defense Panel, originators of the "transformation" concept, initially embarked upon their work as a congressionally-mandated independent review of the newly established Department of Defense quadrennial defense review (QDR) process. The Department of Defense issued its QDR report in May 1997; Congress mandated by and received from the National Defense Panel a report in December 1997.

In its report, the National Defense Panel asserted transformation was an immediate priority.

The panel did not recommend changes to force structure or name new missions but instead emphasized existing missions (homeland defense, countering weapons of mass destruction, maintaining space superiority, developing information capabilities, projecting military power, and preserving regional stability) and particular capabilities (stealth, speed, range, leaner logistics, and precision strike) for greater attention.

Transformation would be twofold: "institutionalizing change and reforming the approach to national security." The former would entail dedicated commands and units conducting purposeful experimentation with attention to the missions and attributes mentioned above. The latter would entail greater interagency coordination, the cultivation of national security professionals, the prioritization of homeland defense, and preparation to work with new security stakeholders.

The December 1997 report included 85 recommendations. When asked how the panel would achieve the change in culture called for in the report, the panel chairman, Philip Odeen acknowledged the Pentagon was a conservative organization, but that segments across the department recognized the need for change and were prepared to be advocates in their own right. As to Congress, Odeen would only comment that the Hill "a different problem," but he asserted enthusiastic support from key leaders left him optimistic, prompting him to state, "If the only result of this is an active debate on these issues, I think we'll feel like our goals were achieved."

The panel anticipated testifying before Congress in January or February.

Chairman Odeen and four other members of the panel testified on its report and recommendations before the Senate Armed Services Committee on January 28, 1998 -- one week after the Monica Lewinsky scandal erupted.

The panel members testified en masse again in March, but did not return to the Hill for the remainder of the year, save for one member's appearance before the House National Security Committee in October to discuss modernization -- as one of nine witnesses.

As Marquez notes, national security matters did play prominently in the remaining years of the Clinton Administration (Al Qaeda, Iraq, Serbia), but the "opportunity for a substantive examination of defense transformation was lost."

Reverberations

The Lewinsky scandal haunts the United States to this day.

The fiscal cliff -- this epitome of governmental dysfunction -- being broached today is, in part, a consequence of time squandered on the Lewinsky scandal.

The scandal's eruption eviscerated the secret agreement and foreclosed the matter for the remainder of Clinton's term. In his first year, Clinton's successor, Republican George W. Bush, proposed and won approval for the Republicans' preferred use of the budget surplus -- comprehensive tax reductions. To exacerbate the matter, in 2004, President Bush signed legislation augmenting Medicare, expanding the entitlement to include prescription medicines. When President Bush announced his intent to explore options for reforming Social Security in 2005, he did so without gauging the potential for collaboration with Congressional Democrats. Bush's successor, Democrat Barack Obama (in cooperation with a Democratic Congress) succeeded in enacting the largest expansion of entitlements -- national health care -- and has presided over unprecedented budget deficits, massively expanding the public debt.

Similarly, the attention diverted to the Lewinsky scandal precluded a comprehensive examination of how transformation might be achieved; its fate eventually became intertwined in the outcome of the next presidential election. The original co-sponsors of the National Defense Panel, Senators Joseph Lieberman and Dan Coats, were the Democratic vice-presidential nominee and the expected Republican secretary of defense, respectively. While Bush won the election, he eventually passed on Coats and instead selected Donald Rumsfeld. After the attacks of September 11th, Secretary Rumsfeld became a forthright advocate of transformation, directing the department to transform how it fought, how it organized, and how it cooperated with other organizations. Rumsfeld accomplished numerous reforms, but his inability to secure victory in Iraq led to his dismissal, discrediting transformation in the process. The mantra of reform has since been supplanted by the frantic pursuit of efficiencies and the scramble for increasingly scarce resources amidst the inevitable post-war budget drawdown.

Most fatefully, during the Lewinsky scandal, Clinton and Gingrich retreated from the agreed upon secret alliance and resorted to rallying their bases for an all-out battle over the fate of Clinton's presidency. The political polarization almost superseded by the October agreement returned with a vengeance and subverted nearly every matter thereafter, from the inviolability of the Secret Service to the decision to use military force abroad. In the next election, the value of every single vote was harshly reinforced. Since then, every election has been about turning out the base -- and from those bases, few visionary leaders have been emerging. President Obama and Republican Speaker John Boehner do not have the working relationship Clinton and Gingrich had and neither have the basis for exploring common ground on the future of the economy or the nation's security. Comprehensive bipartisan proposals to reform entitlements have become increasingly rare. Nor does a constituency exist for exploring potential solutions in either party. (In a cruel twist of fate, the aforementioned Erskine Bowles failed twice during the 2000s to win a U.S. Senate seat from North Carolina. He most recently served on President Obama's National Commission on Fiscal Responsibility and Reform, which named recommendations for achieving long-term fiscal sustainability. The commission's recommendations have essentially been ignored.)


In August 2011, Standards and Poor downgraded America's credit rating from AAA. 

 In revisiting the findings and recommendations in 2011 and whether America was prepared the security challenges of the 2010 to 2020 period, only one panel member responded in the affirmative. Four panel members answered in the negative and the remaining four panel members thought the record was mixed.  

The key provisions of the fiscal cliff: expiration of the Bush tax reductions and $550 billion in automatic across-the-board defense budget reductions over the next ten years.


...

In his Farewell Address, Clinton put three challenges to the American people -- maintaining fiscal responsibility, remaining committed to leading the world, and remaining united in the face of diversity and adversity.

Today, the country is economically stagnant. The unemployment rate has hovered above seven percent since 2009 and the growth rate has averaged less than three percent for the same period. The country is strategically adrift as American foreign and national security policy continues to be implemented with mechanisms and processes that were crafted sixty-five years ago. The president now wages war unilaterally with remotely-piloted vehicles and exercises leadership "from behind." Lastly, the country's future is on the precipice of calamity because present executive and legislative leadership are partisans, not patriots.

Historians may judge Clinton leniently, but for his inability to withstand temptation, the course of history changed and the American Republic staggers.

Keeping Cool With Conservatism

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Heralded as a replay of the historic 1980 election, conservatives supported former Governor Mitt Romney in a bid to oust President Barack Obama.  While Obama was more formidable than James Carter and Romney rarely invited positive comparisons to Ronald Reagan, conservatives nonetheless rallied, confident America would again elect a Republican amidst economic stagnation.  On the eve of the election, the race was essentially tied and confidence ran high.  On election day, Romney commented he had prepared only one speech, one to celebrate victory, and many believed he would deliver it.  Nonetheless, three hours after polls closed on the East Coast, NBC and Fox News networks declared Obama the winner by way of the Electoral College.  Of the numerous battleground states allegedly within his reach, only one, North Carolina, went for Romney.  Even worse, Republicans lost two additional seats in the Senate, failing to win the chamber when the party was well-positioned to do so for the second election in a row.  Far from 1980 redux, the 2012 election ended soundly in favor of Obama and the Democratic Party.  The prevailing conclusion?  Commentators in abundance declared the conservative Republican Party too white, too male, and too old (11/30, 113,000,000 results!), whereas the liberal Democratic message was in harmony with America’s changing demographics.  If the reality is demography equals destiny, then the imperative is adapt or die.  Justifiable advice, yet observers have not explained why America’s new demography should obviate liberty, tradition, and individualism as the basis for future political success.

Disingenuous Advice

To preface, the demographics are indeed daunting.  In the immediate aftermath, observers, liberal and conservative alike, have documented the breadth of Obama’s victory in various sub-sections of the electorate.  Obama swamped Romney among African-American and Hispanic voters, garnering 74% and 91%, respectively.  Now, the attention is on the probable permanence of this advantage.  The Pew Research Center’s latest analysis underscores how the youth vote carried him to victory, especially in swing states.  

Hopeful the possibilities of large majorities voting Democratic in 2008 and 2012 will continue for decades, liberals are gleefully extrapolating the permanent emasculation of the Republican Party.

If Republicans hope to compete, the advice is, again, to simply adapt.  Indeed, Senate and House Republicans are apparently preparing to forsake an anti-tax pledge made to voters and are receiving encouragement from the mainstream media.

Adapt What?

Numerous observers have argued Republicans and conservatives should be prepared to revisit positions on taxes, immigration, and various social matters.  

To test this advice, it should simply be turned on its head.  

Reviewing the record, the Democratic Party has embraced it and have become more competitive.  However, Democratic leaders did so out of convenience not conviction.  In the wake of the Walter Mondale debacle in 1984, leaders like William Clinton established the Democratic Leadership Council, specifically to move the party more to the right.  Clinton won the next two presidential elections, but tellingly, he only won popular vote pluralities and Congress flipped to the Republicans for the first time in forty years.

As noted previously, liberal political adaptability merely demonstrates sheer expediency. Liberal ideological slipperiness is legendary.  Revisit the embrace of African-American civil rights in the 1960s.  Recall the awkward ride in an Abrams tanks and purposely attending the execution of a mentally deficient inmate.  Witness former President Clinton’s energetic campaigning on behalf of Obama just this past fall.

Only Democrats Divide and Conquer

Of the last, perhaps Clinton readily recognized the Obama’s ruthless exploitation of America’s demographic faultlines would pay dividends at the voting booth.

Few observers assert Obama ran a campaign as dignified as his historic run in 2008.  Obama unashamedly castigated upper class Americans, exaggerated the fate of reproductive rights, and enthusiastically balkanized the electorate.  Obama had a record to run on -- Vice President Joseph Biden was the surprisingly articulate candidate in this regard, succinctly reminding voters that under Obama “General Motors was alive and Bin Laden was dead,” -- he just declined to trust the voters.

Instead, Obama and allies depicted Mitt Romney as a rapacious corporate raider and asserted the conservative agenda was merely a collection of racist misogynist code words.  And once the die is cast, rare is the individual who can simultaneously refute the charges and retain the high ground.  

Grounded in an individualist worldview, conservatives cannot be reasonably expected to appease ethnic-specific interests.  Moreover, no self-respecting conservative would ever contort him or herself in the same fashion as “part Cherokee” Elizabeth Warren.  No dignified Republican or conservative would ever threaten an audience of evangelicals that liberal Democrats were intent on imposing atheism, a proposition as ludicrous as re-instituting slavery.

Acknowledged, Romney and allies did not help themselves with ridiculous unforced errors throughout the campaign.  Between “corporations are people,” “self-deportation,” and “legitimate rape,” Republicans are lucky voters simply did not abandon them in droves.

Going forward, Romney will mark the last time establishment Republicans can bank on their alleged “electabability.”  Romney is the ultimate “broken compass” candidate -- a reminder of a path to take again.  The 2012 Republican electorate was not too white, too male, or too old -- he was.  Romney was the weakest primary frontrunner ever and he barely limped across the finish line.  And in a classless back of the hand to the supporters who had graciously discounted his “47 percent” comments, Romney confirmed the cynicism everyone suspected only days after the election, asserting Obama won on the basis of promised “gifts.”  Good riddance...

Beyond Demographics

The proper response to all this demographically-induced Schadenfreude should be “so what”.

The argument that liberty is a message inaudible to some purely because of their origins is an old one -- and one repeatedly demonstrated as false.  In the past half-century, Germany, Japan, and India have contravened expectations and demonstrated the universality of democracy and liberty.  In the past week, Egyptians have quickly rallied to defend the liberating spirit of the Arab Spring against the autocratic aspirations of President Mohamed Morsi.

Liberal proponents will gladly trumpet demographics because their only objective is gaining and retaining political power.

The challenge is refusing to do battle with liberals on the treacherous and unforgiving terrain of race.  “No one can beat the Democrats at the politics of social division.”  

Whether it was naive optimism or delusion, the notion African-Americans would abandon Obama because their economic position had deteriorated during his Administration was laughable.  Hispanics have seemed a natural constituency for several elections cycles now, but their purportedly inherent conservatism has not translated into successive greater voting for conservative candidates and, more pointedly, this expectation is not necessarily supportable.  Asians ostensibly have less affinity for liberal positions than Hispanics and still an antipathy is evident.

In contrast, modern conservatism is and should remain premised on liberty, tradition, and individualism, regardless of electoral results.  

More broadly, Republicans cannot simply assume a voter’s ostensibly latent social conservatism will eventually surpass his or her (current) primary political interest -- their economic well-being.

Republican social conservatism need not be muted, merely stop pursuing perfection at the expense of what’s possible; social conservatives have secured strong majorities in favor bans on partial birth abortion, and parental and spousal notification laws, but no law is ever going to require a woman to bear the child of her rapist.

Keep the Focus on Government

In the near term, the priority should remain presenting a comprehensive reform agenda that focuses on the mission and size of government while eviscerating liberalism’s governance model.  

A grand compromise to address the current fiscal crisis should not entail merely agreeing to higher taxes.  Conservatives should confound the opposition by wholeheartedly embracing redistribution and alternatively proposing the establishment of a guaranteed minimum income.  

(For Republican and conservative Romney voters who oppose this idea, they should not forget it was Republicans vowing to preserve Medicare during the campaign.)

Mightily as Republicans and conservatives have campaigned against big government since Ronald Reagan, their effort has come to naught.  In the present day, two-thirds of federal spending will go to entitlements. In 2010 alone, governments at all levels oversaw a transfer of $2.2 trillion — three times as much as all military and defense spending that same year.  Indeed, Republicans have been complicit.

Instead of tinkering with marginal tax rates, credits, and deductions and promises of spending cuts, conservatives should agree to a higher, rationalized flat tax in exchange for the establishment of a bureaucracy-less welfare system.  Indeed, Ryan’s Medicare reform plan featuring premium support should be the template for reforming all realms of government assistance.  

The post-war G.I. Bill amounted to direct income support and it succeeded beyond expectations -- because it empowered individuals, because it cultivated the country’s human capital, because it provided the basis for the gigantic American economic growth engine many are seeking to resuscitate today.  

More importantly, the G.I. Bill did not abet the massive expansion of government.  

As critical as maintaining a balkanized ethnic coalition is to Democratic fortunes, the public sector union vote is more so.  Union representation in the private sector may have declined precipitously, but public sector unions remain robust and have decidedly favored the Democratic Party and liberal causes.  If even a portion of the federal bureaucracy was dismantled, a key component of the Democratic voter mobilization and financial machinery would be impaired.

---


Conservatives may have thought mantra such as “spreading the wealth around” and “paying their fair share” would have sunk Obama, but he has now been elected president twice.  Obamacare is now poised for implementation.  Time is short - a vision of comprehensive reform is required.

Charlatans At The Gate

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In 1996, the last time President William Clinton spoke at a reelection convention, the United States was enjoying peace and prosperity and he was promising to build a bridge to the 21st century.  Having successfully persuaded his party to jettison the repellent liberalism of McGovern, Carter, and Mondale (as well as that of his first two years), Clinton coasted to reelection, the first Democratic incumbent to do so in thirty-two years.  In the present day, Clinton has committed himself to the reelection of President Barack Obama, the most liberal Democratic political figure since McGovern, maybe even Henry Wallace.  Clinton famously declared the era of big government over, but Obama has presided over its resurgence with a vengeance.  Clinton couldn't persuade America to elect his preferred successor amidst unprecedented peace and prosperity, but now he’s asking Americans to re-elect Obama amidst international tensions and a stagnant economy.  Clinton may have accused Republicans of living in an “alternative universe,” but his rhetoric suggests he may have finally inhaled.  As far as alternative futures go, Obama would have served America if he had emulated Clinton of 1994.  Instead, Americans now face a future well-trodden by other nations brought low by excess.

The Recovery America Missed Out On

In 1992, Clinton won the presidency in a three-way race featuring incumbent Republican George H.W. Bush and independent Texas businessman H. Ross Perot.  The latter had capitalized on dissatisfaction with Bush, whose foreign policy expertise was unparalleled but seemed confounded by the economic slowdown that had begun in 1991.  With Perot establishing the basis for an ostensibly non-partisan critique of Republican principles, Clinton was able to declare himself a “New Democrat,” breaking with the liberal pedigree of previous Democratic nominees.  Clinton won by promising to govern in accordance with middle class priorities.


Unfortunately, the twelve year absence from the White House eroded the readiness of the Democratic Party to assume the presidency.  Clinton, a masterful campaigner, was notoriously undisciplined.  In the first year, Clinton’s vow to focus on the economy “like a laser beam,” was marred by an inability to obtain bipartisan support for his agenda, proposals to permit homosexuals in the military, expensive haircuts, the travel office firings, suspicions of corrupt land and commodity deals, and a close associate’s suicide.  


The economy began to recover in 1993, but Clinton nevertheless announced his intent to establish national health care that fall.  The resulting plan to place one-seventh of the economy under the control was developed confidentially by a task force led by the First Lady, whose profile galvanized conservative opposition.  The long drive concluded in August 1994 when congressional Democrats announced the initiative had failed.


Republican congressional conservatives, led by Representative Newt Gingrich, announced an alternative agenda, the “Contract With America,” and successfully nationalized the 1994 mid-term elections.  That year the Republican Party won majorities in the Senate and the House, for the first time since 1954 in the latter.


The degree to which Gingrich and Republican conservatives dominated the subsequent debate left the Clinton memorably protesting, “The president is still relevant here” in April 1995.  Drawing on a previous experienced when he was similar rebuked by Arkansas voters after his first term as governor, Clinton regrouped and explored any and all opportunities to co-opt the Republican opposition.  Clinton famously “triangulated” a position between conservative Republican and liberal Democrats and then he out-manuevered Gingrich during federal budget negotiations but concluded a deal with him for welfare reform.  By summer 1996, Clinton had succeeded in re-positioning himself for re-election.


Arguably, the Republican victory in 1994 saved Clinton from himself.  


If Clinton had retained Democratic majorities for the remaining two years of his presidency, it’s unlikely a Democratic Congress would have exercised the fiscal restraint Republicans did.  Moreover, Clinton would not have concluded the balanced budget deal, which included a tax cut, in 1997.  By 2001, Clinton had presided over three surpluses and an economy growing above four percent for four years.  In the aggregate, between 1993 and 2001, the United States experienced 116 consecutive months of economic growth, a decline in unemployment from 6.9 to 4.0 percent, and a reduction in the publicly held debt by $363 billion.


In stark contrast, the Republican “thumpin’” in 2010 prompted no adjustment in Obama’s course.  The president failed to develop a working relationship with the minority Republican caucus during his first two years and then relied on his meager experience in the Illinois state senate to size up John Boehner, the new Speaker.  Having secured a concession for $800 billion in new revenue, Obama then clumsily requested the Speaker to agree to $400 billion more.  The negotiations collapsed and a comprehensive budget deal have remained a remote prospect.  


Instead of a budget deal and recovery, America has remained economically debilitated.
(Data, Charts: GDP Growth, Budget Balance, Price of Gas, Inflation, Unemployment)

As only a foreign observer could observe, “America could be one budget deal away — in the context of economic recovery — one budget deal away from banishing the notion of American declinism.”


The Bullet America Dodged


The Clinton presidency is not the only Democratic template for imagining how a second Obama term would unfold.


Republicans have depicted the 2012 election as 1980 redux given the parallels between Obama and President James Carter.  Both won the White House promising a new era in Washington, both tackled peripheral issues (energy, health care) instead of focusing on the health of the economy, and both spurred a resurgence of conservatism.  In the election, Reagan trounced Carter and went on to preside over the longest economic boom until Clinton took office.


In 1980, the American economy experienced a sharp recession and Carter was coping with a record high “misery index” and the ravages of stagflation.  Carter acknowledged the seriousness of his problems, but the president who declared a “crisis of confidence” could only promise a progress that would come “slowly, … and at the cost of some sacrifice on the part of us all.”


And what were his priorities?  Delaying the implementation of a tax cut, increasing the gasoline tax, and introducing national health insurance.


And what was the president’s economic forecast?   The Administration lowered five year gross domestic product (GDP) projections downward each year in office, and to underscore its ineptitude, each forecast proved too optimistic.  


In its first year, the Administration forecast five-year growth of 5.1 percent; actual growth came in 3.1 percent.  By 1980, the Administration forecast five-year growth of 3 percent; actual growth was 2.3 percent.


Upon taking over, President Reagan instituted his economic program of lower taxes and began introducing more realistic five year forecasts immediately.  In 1981, the Administration revised the outgoing Carter team’s budget and projected five year growth of 3.8 percent.  


The forecast was the last time the Reagan Administration under-estimated economic growth.  


In each of the next three years, the Reagan Administration raised their forecasts over the prior year’s; moreover, in each year, economic growth exceeded their projections.  By 1984, the Reagan Administration forecast five-year growth of 3.9 percent.  Actual growth clocked in at 4.3 percent.


Carter’s economic record may have been abysmal but, unfortunately, his record abroad was even more disheartening.  


Camp David Peace Accords aside, Carter presided over discord with American allies and advances by American enemies, such as Cuban intervention in Africa and the communist takeover in Nicaragua.  


The hostage crisis in Iran and failed Desert One rescue attempt epitomized Carter’s fecklessness.  (The hostage crisis played a major role in undermining Carter’s re-election bid, but the negotiations almost succeeded before the election and would have probably been concluded before the start of a second term.)


However improbable a second term would have been, the question remains whether America would have possessed the capabilities to recover from the damage to its interests from the previous four years is questionable.  President Carter initiated the defense build-up brought to full fruition by the Reagan Administration, but he also oversaw the complete evisceration of America’s covert intelligence capabilities.  Without these critical tools, America will not have an opportunity to arm anti-communist rebels around the world, including the mujahedin in Afghanistan, whose victory eventually sets in motion the fall of the Soviet Union.


Of the last, Americans need only remember Carter once argued the nation needed to overcome its “inordinate fear” of communism only to undergo a “dramatic change” in opinion after the Soviet invasion of Afghanistan.  In contrast, Reagan warned of an “evil empire” only to collaborate with a Soviet leader who would the concede the moral bankruptcy of communism and help consign it to the ash bin of history.


America truly dodged a bullet in having Reagan at the helm instead of Carter.


Bait and Switch


Nonetheless, the above exploration is irrelevant; the alternative future faced today is not the glib aside of a former president but the one of an America unlike the one Reagan or Clinton inherited.


As American scholar Nicholas Eberstadt demonstrates in his latest analysis of government spending, entitlement transfers to individuals have grown 727% between 1960 and 2010, an expansion that inverts the priorities, structure and functions of the federal government in a revolutionary manner when compared to all previous American history.  


Obama marks the apogee of the liberal aspiration to expand the entitlement state.


Accordingly, Clinton is so ready to endorse Obama because, perhaps, Obama succeeded where he did not.  Forsaking America’s conservative electorate is Obama’s mode of leadership not Clinton’s.  Nationalized health insurance is Obama’s triumph not Clinton’s.  


Clinton and Obama may helm opposing factions within the Democratic Party, but they are both committed to the success of contemporary partisan liberalism, which depends on expanding entitlements and redistributing wealth.  (Tragically, the commitment is bipartisan.  Eberstadt additionally notes both political parties have virtually colluded in an “unspoken consensus,” incomprehensibly out-bidding the other with promises to either preserve or increase entitlements.  


“The U.S. is a very wealthy society. If it so chooses, it has vast resources to squander. And internationally, the dollar is still the world's reserve currency; there remains great scope for financial abuse of that privilege.  Such devices might well postpone the day of fiscal judgment: not so the day of reckoning for American character, which may be sacrificed long before the credibility of the U.S. economy. Some would argue that it is an asset already wasting away before our very eyes.”



Ultimately, the price is an inevitable future -- economic bankruptcy and deconstruction of the American Republic.

Why Democracies Go To War Against Other Democracies


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Amidst the electoral ascendancy of Islamists in the Middle East and the apprehension it inspires, the saving grace is a faith in Immanuel Kant’s thesis of a democratic peace.  Whatever concerns an Islamist president in Egypt may stoke in the West or Israel, many observers will assert the long term prospects for a global peace are only enhanced by the addition of yet another democracy.  While not yet tested, the historical record of democracies does indeed show a remarkable recourse to peaceful resolution of conflicts.  (Dictatorships may suffer at the hand of democratic war machines and intelligence machinations, but few liberated populations are lamenting the belligerence of democracies.)  Fledgling democracies do present a challenge in their susceptibility to populists and chauvinists, but again the instances of outright war have been minimal.  In the end, the prospects for global peace only grows, correct?  Well, just as the post-Cold War wave of democratization begins impacting the Middle East, the phenomenon of globalization exposes a critical shortcoming of the democratic peace proposition.  “Failed states” and “non-state actors” have become part of a nation’s threat matrix, but they have never been accorded the parity they are beginning to merit.  In the post-Westphalian era, states must now share space with non-state actors, specifically global corporations, whose resources and influence can exceed that of states.  Suddenly, a conflict between democracies, aligned with opposing corporate interests, becomes conceivable.

Corporate Climbing...

The ascendancy of corporations and the influence they exercise is not new.  The British East India Company was the vehicle for British domination of the Indian subcontinent.  Cecil Rhodes’ diamond ventures provided the foundation for his conquest of South Africa (again for Britain).  What is new is their capabilities vis-a-vis mature states.

In Power Inc., American scholar David Rothkopf outlines the dyad of ExxonMobil and Sweden; the latter was a onetime European major power and is now the touchstone for liberal democracy, but the former, a consequence of American antitrust action against John D. Rockefeller's oil empire, easily prevails:

  1. Sweden’s GDP in 2009 was $406 billion. Exxon’s annual sales that year were $442 billion.
  2. Sweden has nine million inhabitants. While Exxon has 83,600 employees, that accounts for directly supporting perhaps half a million lives. Add in its global network of 175,000 supplier companies and ten million customers and the reach grows. Exxon has 2.5 million shareholders, of which two thousand are institutional and represent the retirement savings of millions who are thereby also linked to the company’s fate.
  3. In 2006, Exxon’s budgeted expenditures exceeded $400 billion. Sweden’s were less than one-third of that amount.
  4. Sweden’s budget is heavily dominated by entitlement spending, over which its government has little control. Exxon spent $66 billion on operating costs alone and $20 billion on capital projects— several times what Sweden could afford.
  5. While Sweden has embassies in about thirty countries, Exxon operates in almost every country worldwide, with product and marketing offices in more than eighty countries and more than a hundred exploration and production sites in thirty countries internationally.

(Rothkopf, David (2012-02-28). Power, Inc.: The Epic Rivalry Between Big Business and Government--and the Reckoning That Lies Ahead (p. 314). Macmillan. Kindle Edition.)

On a global matter like climate change, Rothkopf notes Sweden, which persuaded 173 countries to sign onto the Kyoto Treaty, was thwarted by an opposition led by corporate interests, including ExxonMobil, which succeeded in persuading the United States against joining.  Rothkopf concluded, “Sweden had a vote and used its leverage cannily. But ExxonMobil, as it turned out, had a veto.”

In time, corporations will recognize the power to deter can be complemented by the capacity to compel, and military capabilities outside the purview of sovereign governments have already matured -- and are available for hire.

Lessons Learned Just This Decade

In June 2012, the United States Joint Staff released a study synthesizing the findings of preceding studies reviewing the past ten years of wars in Afghanistan and Iraq into eleven strategic themes.  The fourth theme, Transitions (e.g. from Phase III to Phase IV, the Coalition Provisional Authority to an Iraqi government), focused on the “[f]ailure to adequately plan and resource strategic and operational transitions endangered accomplishment of the overall mission.”  

The study noted the United States had meticulously planned and trained extensively for major combat operations, while neglecting preparation for contingency or stability operations.  Moreover, as decision-makers recognized the need for capabilities, adequate resources were rarely provided. The study acknowledges DOD later established training for stability operations, but conveniently omits how the capability gap was mitigated in the interim.

The reliance on contractors has been derided but, indeed, private security companies have developed and possessed skill sets in environments where modern militaries are reluctant to commit.  Their deployment in the past decade in post-combat Phase IV operations was critical.  Similarly, private security companies have also been integral to fulfilling pre-combat “Phase 0” operations -- preventing conflict in the first place, again another task modern militaries are hesitant to undertake.

As submitted by American scholar (and one-time practitioner) Dr. Sean McFate, the value of successfully prosecuting major combat operations (e.g. Phase III) has diminished and the importance of preventing conflict or ensuring stability has risen.  However, the United States has signaled the intent to avoid such engagements; as such, private security companies will become increasingly relied upon to prevent conflict or ensure stability.

Major global energy corporations, such as ExxonMobil, already rely on private security companies around the world to safeguard corporate property and assets.  

If major corporations do identify the need to prevent conflict or ensure stability, then the subsequent decision to employ private military capabilities could increase the prospect for conflict, even unprecedented ones between democracies.  Consider the following speculative scenario. (As a Senior Analyst with Wikistrat, the author developed the below while participating in a simulation examining the durability of the "democratic peace" thesis in the future.)

Southeast Asia, The Near Future

Present-day Indonesia and Malaysia are the result of the 1997 Asian financial crisis.

(Acknowledged, Malaysia is a “partly free” country, as determined by Freedom House; more pointedly, the organization states “Malaysia is not an electoral democracy.”  Nonetheless, the citizens are practiced in elections and possess de jure rights, suggesting a population acclimated to democratic customs could accomplish a transition.)

While each endured significant political transitions, each nation remained committed to modernization and competing in the global economy.  Modernization, however, entails foreign direct investment, which in turn requires a secure environment.

If Indonesia and Malaysia welcome substantial investment from global energy providers, their presence could entail the use of private security companies as well.  The aggregate investment could well form a constituency prepared to seek influence and lobby the prevailing governments to favor its agenda, even at the risk of interstate conflict.

Indonesia, as the most impacted, has learned the most and resurrected itself; indeed, subsequent to the 2008 collapse, Indonesia’s growth accelerated and is “the commodity economy that works.”  By contrast, Malaysia remains committed to central planning and has not sufficiently diversified its economy.  

Indonesia was a member of the Organization of Petroleum Exporting Countries (OPEC) from 1962 to 2009.  However, in 2004, the country became a net oil importer and, in 2009, suspended its OPEC membership. Since becoming an oil importer, Indonesia has focused on securing energy sources for its domestic market.

Malaysia is focused on efforts to enhance output from existing oil and natural gas fields and to advance exploration in deepwater areas.  Malaysia’s oil sector is dominated by the nation’s oil and gas company, Petroliam Nasional Berhad (Petronas).  The company holds exclusive ownership rights to all oil and gas exploration and production projects in the country and is the single largest contributor of Malaysian government revenues (over 40 percent in 2010).  Foreign companies are permitted to invest, provided minimum equity is extended to Petronas; as such, ExxonMobil, Shell, and Murphy Oil are the largest foreign oil companies by production volume.

In the near future, both Indonesia and Malaysia could conclude greater foreign direct investment in its indigenous oil sectors would be beneficial to development.  Indonesia has coped with ethnic unrest in the past and may have to do so in the future; Malaysia is concerned about piracy in neighboring waters and has committed resources to combat it.  As neither country may possess ample military resources nor be inclined to expend significant resources protecting foreign corporate assets, investing corporations might enlist private security companies to provide or augment local military support.

Maybe the energy-security ventures are near each other geographically (perhaps in the Celebes basin where the area is in dispute between the two countries or the Dumai oil refinery where Indonesia oil is transported via pipeline to Malaysian refineries) but neither the host country or corporate leadership has communicated on appropriate rules of engagement.  

In the event of any accusations of encroachment, the chance for outside independent confirmation may be minimal.  

In the event of subsequent encounters, each side may allege the other side used force.

Unable to clear the matter via inter-corporate negotiations, the energy-security ventures may decide to lobby their host nations for military support, warning any failure to support would result in divestment.  

Amidst increased news reporting, coupled with sensationalist rumors, some local political leaders may support the call for military force.  Components of the national leadership, some with connections to the investments in question, may too support the use of force.  

As momentum comes to a head, Indonesian and Malaysia militaries engage each other; news of bloodshed deepens the crisis and two nations, once at peace, now confront each other militarily on the basis of hostilities between opposing energy-security ventures.

...

Since the end of the Cold War, American foreign policy has been erratic but an underlying constant has been its evangelism on behalf of democratization.  The means have varied and the results have been mixed, but the democracy's advance, however slow, has redeemed (mostly) redeemed American undertakings.  Unfortunately, the combination of fruitless nation-building in Afghanistan and a stagnant economy at home have left American decision-makers searching for ways to satisfy the impulse to champion beseiged democrats while avoiding undue (read military) intervention.  

Complicating the matter has been the fate of the American economy.  

Fantasy ideologies like fascism, communism, and reactionary theocracies have been unable to supplant liberal democracy as the most effective mode of sovereign governance, but its fellow sibling, Anglo-Saxon capitalism, has been less fortunate.  

Indeed, Rothkopf declares the international arena now features "competing capitalisms" -- the original Anglo-Saxon laissez faire capitalism, the authoritarian mercantilist version, and the "country as corporation" variant.  Such heterogeneity has already confounded one aspect of U.S. foreign policy (e.g. the PRC, "partner or peer competitor?") and with the conceivability of war between democracies increasingly possible, how long can the U.S. persist in pursuing democratization before realizing global peace may still be elusive?

Perhaps instead of democracy, American foreign policy can focus on facilitating modernization instead, albeit on two important criteria.  American scholar Parag Khanna has concluded globalization's challenges and dynamics elevate the importance of "governance" and "rule of law".  

Why?  Because contemporary challenges are no longer the domain of states or solvable by states alone, even if one of the states is the greatest combination of economic and military power history has ever seen.  The multiplicity of actors and the speed at which they can effect change globally means sovereign power need not be superior militarily or economically, just good enough to facilitate an actor's capacity to act in concert with other like-minded actors.

Shifting emphasis from democracy to governance and rule of law would shift attention and resources from Afghanistan to Sri Lanka, newly emergent from civil war and poised to flourish.  The Legatum Prosperity Index, which measures countries in terms of wealth and well-being, Sri Lanka, Malaysia, and Indonesia rank 63rd, 43rd, and 70th, respectively, and ahead of Turkey (75) and India (91).  The shift would benefit American diplomatic and commercial interests in the Indo-Pacific far more than patrolling the Afghan frontier.

America will still be a stalwart defender of democracy, it must simply recognize that helping struggling democrats modernizing their country sometimes deserve help before besieged democrats receive it.  Without good governance or the rule of law, the above scenario may demonstrate why democracy may not be the panacea Kant anticipated.