Financial elites jump onto plan B....
DISPATCHES FROM AMERICA
How to rule the world after Bush
By Mark Engler
Picture January 20, 2009, the day George W Bush has to vacate the Oval Office.
It's easy enough to imagine a party marking this fine occasion, with antiwar
protesters, civil libertarians, community leaders, environmentalists,
health-care advocates and trade unionists clinking glasses to toast the end of
an unfortunate era. Even Americans not normally inclined to political life
might be tempted to join the festivities, bringing their own bottles of bubbly
to the party.
Given that presidential job approval ratings have rarely broken 40% for two
years and now remain obdurately around or below
30% - historic lows - it would not be surprising if this were a sizeable
celebration.
More surprising, however, might be the number of people in the crowd drinking
finer brands of champagne. Amid the populist gala, one might well spot figures
of high standing in the corporate world, individuals who once would have looked
forward to the reign of an MBA president but now believe that neo-conservative
bravado is no way to run an empire.
One of the more curious aspects of the Bush years is that the self-proclaimed
"uniter" polarized not only American society, but also its business and
political elites. These are the types who gather at the annual, ultra-exclusive
World Economic Forum in Davos, Switzerland, and have their assistants trade
business cards for them. Yet, despite their sometime chumminess, these powerful
few are now in disagreement over how American power should be shaped in the
post-Bush era and increasing numbers of them are jumping ship when it comes to
the course the Republicans have chosen to advance these past years. They are
now engaged in a debate about how to rule the world.
Don't think of this as some conspiratorial plot, but as a perfectly
commonsensical debate over what policies are in the best interests of those who
hire phalanxes of Washington lobbyists and fill the coffers of presidential and
congressional campaigns. Many business leaders have fond memories of the "free
trade" years of the Bill Clinton administration, when chief executive officer
salaries soared and the global influence of multinational corporations surged.
Rejecting neo-conservative unilateralism, they want to see a renewed focus on
American "soft power" and its instruments of economic control, such as the
World Bank, International Monetary Fund (IMF), and World Trade Organization
(WTO) - the multilateral institutions that formed what was known in
international policy circles as "the Washington Consensus". These corporate
globalists are making a bid to control the direction of economic policy under a
new Democratic administration.
There is little question that the majority of people on the planet - those who
suffered under both the corporate globalization of the Clinton years and the
imperial globalization of Bush - deserve something better. However, it is far
from certain that social justice advocates who want to encourage a more
democratic approach to world affairs and global economic well-being will be
able to sway a new administration. On the other hand, the damage inflicted by
eight years of neo-con rule and the challenges of an increasingly daunting
geopolitical scene present a conundrum to the corporate globalizers: Is it even
possible to go back to the way things were?
The revolt of the corporatists
Throughout their time in office, despite fulsome evidence of failure, Bush and
Vice President Dick Cheney have maintained a blithe self-confidence about their
ability to successfully promote the interests of the United States, or at least
those of their high-rolling "Pioneer"-class donors. Every so often, though, the
public receives notice that loyalists are indeed scurrying to abandon the
administration's sinking ship of state. In October 2007, for instance, in a
front-page story entitled "GOP Is Losing Grip On Core Business Vote", the Wall
Street Journal reported that the party could be facing a brand crisis as
"[s]ome business leaders are drifting away from the party because of the war in
Iraq, the growing federal debt and a conservative social agenda they don't
share".
When it comes to corporate responses to the president's "war on terror", we
mostly hear about the likes of Halliburton and Blackwater - companies directly
implicated in the invasion and occupation of Iraq, and with the mentality of
looters. Such firms have done their best to score quick profits from the
military machine. However, there was always a faction of realist,
business-oriented Republicans who opposed the invasion from the start, in part
because they believed it would negatively impact the US economy. As the
administration's adventure in Iraq has descended into the morass, the ranks of
corporate complainers have only grown.
The "free trade" elite have become particularly upset about the
administration's focus on go-it-alone nationalism and its disregard for
multilateral means of securing influence. This belligerent approach to foreign
affairs, they believe, has thwarted the advance of corporate globalization. In
an April 2006 column in the Washington Post, globalist cheerleader Sebastian
Mallaby laid blame for "why globalization has stalled" at the feet of the Bush
administration. The White House, Mallaby charged, was unwilling to invest any
political capital in the IMF, the World Bank or the WTO. He wrote:
Fifteen
years ago, there were hopes that the end of Cold War splits would allow
international institutions to acquire a new cohesion. But the great powers of
today are simply not interested in creating a resilient multilateral system ...
The United States remains the only plausible quarterback for the multilateral
system. But the Bush administration has alienated too many players to lead the
team effectively. Its strident foreign policy started out as an understandable
response to the fecklessness of other powers. But unilateralism has tragically
backfired, destroying whatever slim chance there might have been of a workable
multilateral alternative.
Frustrated by Bush's failures, many
in the business elite want to return to the softer empire of corporate
globalization and, increasingly, they are looking to the Democrats to navigate
this return. As a measure of this - the capitalist equivalent of voting with
their feet - political analyst Kevin Phillips notes in his new book,
Bad Money,
that, in 2007, "[h]edge fund employees' contributions to the Senate Democratic
Campaign Committee outnumbered those to its Republican rival by roughly nine to
one".
This quiet revolt of the corporatists is already causing interesting
reverberations on the campaign trail. The base of the Democratic Party has
clearly rejected the "free trade" version of trickle-down economics, which has
done far more to help those hedge-fund managers and private-jet-hopping
executives than anyone further down the economic ladder.
As a result, both Senators Barack Obama and Hillary Clinton are running as
opponents of the North American Free Trade Agreement (NAFTA) and of a newer
bilateral trade deal with Colombia, a country in which organizing a union or
vocally advocating for human rights can easily cost you your life. The tenor of
the current campaign represents a significant shift from the 1990s, when top
Democrats were constantly trying to establish their corporate bona fides and
"triangulate" their way into conservative economic policy.
Still, both candidates are surrounded by business-friendly advisors whose views
fit nicely within an older, pre-Bush administration paradigm of corporate
globalization. The tension between the anti-NAFTA activists at the base of the
party and those in the campaign war rooms has resulted in some embarrassing
gaffes during the primary contest.
For Hillary Clinton, the most notable involved one of her chief strategists,
Mark Penn, a man with a long, nefarious record defending corporate abuses as a
Washington lobbyist. As it turned out, Penn's consulting firm received
US$300,000 in 2007 to support the "free trade" agreement with Colombia. Even as
Clinton was proclaiming her heartfelt opposition to the deal and highlighting
the "history of suppression and targeted killings of labor organizers" in that
country, a key player in her campaign was charting strategy with Colombian
government officials to get the pact passed.
The Obama campaign found itself in similar discomfort in February. While the
candidate was running in the Ohio primary as an opponent of NAFTA, calling that
trade deal a "mistake" that had harmed working people, his senior economic
policy adviser, University of Chicago professor Austan Goolsbee, was meeting
with Canadian government officials to explain, as a memo by the Canadians
reported, that Obama's charges were merely "political positioning".
Goolsbee quickly claimed that his position had been mischaracterized, but the
incident naturally raised questions. Why, for example, had Goolsbee, senior
economist to the Democratic Leadership Council, the leading organization on the
corporate-friendly rightwing of the party, and a person praised as "a valuable
source of free-trade advice over almost a decade", been positioned to mold
Obama's economic stances in the first place?
If pressure from the base of the party lets up after the elections, it would
hardly be surprising to see a victorious candidate revert to Bill Clinton's
corporate model for how to rule the world. However, a return to a
pre-Bush-style of international politics may be easier dreamed than done.
The neo-con paradox
To the chagrin of the "free trade" elite, the market fundamentalist ideas that
have dominated international development thinking for at least the past 25
years are now under attack globally. This is largely because the economic
prescriptions of deregulation, privatization, open markets and cuts to social
services so often made (and enforced) by the IMF and the World Bank have proven
catastrophic.
In 2003, the United Nations' Human Development Report explained that 54 already
poor countries had actually grown even poorer during the "free trade" era of
the 1990s. The British Guardian summarized well the essence of this report:
Taking
issue with those who have argued that the "tough love" policies of the past two
decades have spawned the growth of a new global middle class, the report says
the world became ever more divided between the super-rich and the desperately
poor. The richest 1% of the world's population (around 60 million) now receives
as much income as the poorest 57%, while the income of the richest 25 million
Americans is the equivalent of that of almost 2 billion of the world's poorest
people.
Such findings led United Nations Development Program
administrator Mark Malloch Brown, in a remarkably blunt statement, to call for
a "guerilla assault on the Washington Consensus".
In fact, in 2008, such an assault is already well under way - and Washington is
in a far weaker position economically to deal with it. The countries burned by
the Asian financial crisis of 1997-98, for instance, are now building up huge
currency reserves so they never again have to come begging to the IMF(and so
suffer diktats from Washington) in times of crisis. Moreover, virtually the
whole of Latin America is in revolt. Over 500 million people reside in that
region, and over two-thirds of them now live under governments elected since
2000 on mandates to split with "free trade" economics, declare independence
from Washington, and pursue policies that actually benefit the poor.
In late April, economist Mark Weisbrot noted that, with so many countries
breaking free of its grasp, the IMF, which once dictated economic policy to
strapped governments around the world, is now but a shadow of its former self.
In the past four years, its loan portfolio has plummeted from $105 billion to
less than $10 billion, the bulk of which now goes to just two countries, Turkey
and Pakistan. This leaves the US Treasury, which used the body to control
foreign economies, with far less power than in past decades. "The IMF's loss of
influence," Weisbrot writes, "is probably the most important change in the
international financial system in more than half a century."
It is a historic irony that Bush administration neo-cons, smitten with US
military power, itching to launch their wars in Central Asia and the Middle
East, and eschewing multinational institutions, actually helped to foster a
global situation in which US influence is waning and countries are increasingly
seeking independent paths. In 2005, British journalist George Monbiot dubbed
this "the unacknowledged paradox in neo-con thinking". He wrote:
They
want to drag down the old, multilateral order and replace it with a new, US
one. What they fail to understand is that the "multilateral" system is in fact
a projection of US unilateralism, cleverly packaged to grant other nations just
enough slack to prevent them from fighting it. Like their opponents, the
neo-cons fail to understand how well [presidents Franklin D] Roosevelt and
[Harry S] Truman stitched up the international order. They are seeking to
replace a hegemonic system that is enduring and effective with one that is
untested and (because other nations must fight it) unstable.
Battered
by losing wars and economic crisis, the United States is now a superpower
visibly on the skids. And yet, there is no guarantee that the coming era will
produce a change for the better. In a world in which the value of the dollar is
plummeting, oil is growing ever more scarce relative to demand, and foreign
states are rising as rivals to American power, the possibility of either going
ahead with the Bush/Cheney style of unilateralism or successfully returning to
the "enduring and effective" multilateral corporatism of the 1990s may no
longer exist. But the failure of these options will undoubtedly not be for lack
of trying. Even with corporate globalization on the decline, multinational
businesses will attempt to consolidate or expand their power. And even with the
imperial model of globalization discredited, an overextended US military may
still try to hold on with violence.
The true Bush administration legacy may be to leave us in a world that is at
once far more open to change and also far more dangerous. Such prospects should
hardly discourage the long-awaited celebration in January. But they suggest
that a new era of globalization battles - struggles to build a world order
based neither on corporate influence nor imperial might - will have only just
begun.
Mark Engler, an analyst with Foreign Policy in Focus, is the author of
How to Rule the World: The Coming Battle Over the Global Economy (just
published by Nation Books). He can be reached via the website Democracy
Uprising.
Edited by vulkan02 - 21-May-2008 at 06:37