Since mortgage bonds held by European banks were issued in dollars, the European banks need to have capital reserved in US Dollars (for regulatory reasons). Usually the banks use LIBOR for this funding, but since LIBOR has gone through the roof, the European banks have turned to the euro/dollar swap market. This is why the dollar hasn't tanked. But if the bailout package passes, and unlocks the credit crunch, LIBOR should go back to normal, which would then precipitate a sell-off of the dollar.
Given the upcoming--and ongoing--elections for President of the United States of America, I thought it might be interesting to take a look at the potential geopolitical effect each of the candidates could have on our standing in the world.
Elections are not believed to be decided on foreign affairs issues. As the Honorable Tip O'Neill famously pointed out, "All politics is local." We are, however, in the midst of a seven year war on two separate fronts, and it may be that some votes will be decided in 2008 on the basis of our foreign policy options and which candidate is most likely to perform well internationally. I am aware of no data on how many voters rate it their top concern, however.
One thing is pretty clear: the world's opinion of the United States has dropped significantly since the war in Iraq began. According to the Pew Global Attitudes Project, in the nation with which we enjoy a "special relationship"(1)--Britain--favorable public opinion of the United States has dropped 19% since 2003--from 70 to 51. In Germany, the drop was 15%--from 45 to 30. In Italy we lost 7% from 60 to 53; in Spain we lost 4% from 38 to 34; and in that old bugbear France we lost 3%, from 42 to 39.(2)
For the rest of the world, there are mixed results since 2003, but the trend from 9/11 is clear. In Canada, by far our largest trading partner(3) and an important source of hydrocarbons, favorable opinion has dropped from 71% in 2000 to 55% in 2007. In Mexico, favorable opinion has dropped from 68% in 2000 to 56% in 2007. For the same period, favorable opinion has dropped by 34% in Argentina, 33% in Venezuela, 24% in Bolivia, 13% in Peru, and 12% in Brazil--mostly from strong majorities.(4)
In Eastern Europe, most states have registered double digit drops in favorable opinions of the US since 2000. (However, this is from strong highs, with several states reporting majority favorable opinions and no states reporting less than 41%.) The very notable--and rather inexplicable to me--exception is Russia, which has seen a 4% rise since 2000, from 37 to 41%. In Turkey, perhaps our most important Muslim ally worldwide and a geostrategical skeleton key to the Middle East, the Mediterranean, and the Black Sea, favorable opinion has dropped from 52% in 2000 to 9% in 2007.(5)
Pew doesn't have data for 2000 for most of the Middle East, but numbers in 2007 are mostly quite low, with Egypt reporting a favorable opinion of 21%, Jordan 20%, and the Palestinian Territories 13%. Kuwait, which we liberated from Saddam in the first Gulf War, reports a favorable opinion of 46%, down 17% from 2003. Lebanon, where the United States was the primary foreign sponsor of removing Syrian influence on that country, has seen a 20% rise since 2003 to a favorable rating of 47%.(6)
Like the Middle East, Pew does not have numbers dating back to 2000 for all the countries it covers in Asia , but the story remains mostly the same. In China, the most significant rising economic and political power in the world, favorable opinions of America have dropped from 42% in 2005 to 34% in 2007. In India, easily the second most significant rising economic and political power worldwide, favorable opinion has dropped from 66% in 2002 to 59% in 2007. (This is despite the nuclear deal of 2006(7), and the determination of the US to create a strong alliance with India.) In Indonesia, which has the largest population of Muslims in the world, membership in OPEC, and sits right on some of the most important shipping lanes in the world, favorable opinion of the US has dropped from 75% in 2000 to 29% in 2007. (This is up, however, from the low of 15% seen in 2003.)(8)
Japan, the third largest economy in the world and our most important ally in Asia, has registered a drop in favorable opinion of 15% from 77% in 2000 to 61% in 2007. South Korea remains steady at 58%. 15% of Pakistanis had a favorable opinion of the US in 2007, worrying given their importance to our efforts versus Al Qaeda and in Afghanistan. 27% of Malaysians have a favorable view of the US. Bangladesh has bucked the trend with 53% seeing the US in a positive light in 2007, up from 45% in 2002.(9)
The good news is Africa, where most nations reported strong majorities having positive views of the US. In Nigeria, the largest oil exporter to the US in Africa and a country with a large Muslims population, our numbers have actually gone up with 70% reporting a positive view of the US in 2007, as opposed to 46% in 2000.(10)
While these numbers are not as bad as some scare-mongers and headlines suggest, the trend is clear and--outside of sub-Saharan Africa--it is not good for American interests. The numbers for several key geopolitical flash points--Turkey, Indonesia, China, Pakistan, and the Middle East--are not good or frankly awful. The numbers for key allies like Japan, the UK, Canada, France, Germany, and Mexico are down.
Given that the above is a fair assessment of the situation, what is the likely effect of our Presidential candidates if elected?
BRIEF ASSESSMENT OF OVERALL US POSITION
SOFT POWER(11): It seems fairly plain that it would be hard to do worse than our current Administration insofar as our cultural and ideological influence around the world goes.
This is, after all, the Administration that OK'd the use of torture, engaged in rendition in order to have others do our dirty work for us, established a prison which seems to have no due process of law in Cuba, no less, and manufactured evidence in front of the entire world in order to prosecute a war against an old enemy.(12)
All the old standbys regarding our principles and what America stands for--due process of the law, fair-mindedness, honesty, work ethic, personal responsibility, democracy, human rights--appear to have been compromised or nearly completely discredited by the current Administration.
This is a tremendous shame because it squandered the overwhelming sympathy the world felt for us after 9/11, and means that we are less able to pursue, and put an end to, those who were responsible. It seems to me that all of the presidential candidates would represent a considerable advantage over the current administration in terms of soft power, though some have more distinct advantages than others, which I will explore below.
HARD POWER(13): American hard power--which is used to refer to the military, economic, and geographic resources that a country may use as carrots and sticks to influence other nations--has been compromised by the current Administration in many ways, though ultimately the country remains undeniably extremely strong.
We are in the middle of a two-front war that has lasted about seven years, with little end in sight. It appears that our military is very stretched at the moment, unable to find enough new recruits to fulfill its current obligations. Should new significant hostilities arise elsewhere, it is not clear that we would have enough material and men available to address it.
Although this may encourage other state actors to behave adventuristically--see, for example, Chavez's recent support for the FARC in Colombia(14)--I suspect there are few that are willing to seriously try the patience of any incoming administration and even fewer that have good reasons, given their interests, to do so. The United States still has the most sophisticated and one of the largest militaries in the world, and by far the largest military budget in the world.(15)
Also, despite the recent downturn, the United States is still the largest economy in the world. This is likely to change somewhat as China and India grow, but whomever we choose to be President will have little effect upon that evolution. Either way, the President will still have considerable resources to bear in any negotiation that the United States might find itself in. Nonetheless, some candidates will have more experience with using these tools than others, which I will discuss below.
THE CANDIDATES:
BARACKOBAMA
SOFT POWER: I think it is plain that Senator Obama would have a tremendous effect on the world were he elected to the Presidency. To state the obvious, his skin is black, and there are many around the world--and even here in the US--who believe that a black man could never be elected President of the United States. There are many in the world who see us as an evil hegemon and who argue that our elections are a sham and that the powers that be would never allow a black man to become President. What would these people say were Senator Obama elected? If the one is true, how could the other have taken place? The credibility of our elections would be in many ways restored, especially after Vice President Al Gore's loss in Florida to the Supreme Court of the United States. There will be some who cannot be convinced no matter what, but the public relations value of his Presidency would be enormous.
Since it is at least popularly perceived that Obama opposed the war in Iraq from the start, the Senator will also not be tied to the current policy in quite the way that the other candidates are. His assertions that the United States will put an end to the use of torture, put an end to Guantanamo, and negotiate directly with those with which the US has strained relations would likely be received as more credible than with the other candidates. This, I believe, would restore much of the credibility of the United States throughout the world and represents a great opportunity.
Moreover, the fact that Obama spent some of his childhood in Indonesia is likely to make some there feel that he would have an understanding of their point of view, an important asset. Indonesia is an important geopolitical flash point where the percentage of folks with a favorable view of the United States dropped to 29% in 2007. His father is from Kenya, and I suspect that the peoples of sub-Saharan Africa, and even in Somalia, would greet his election with something akin to wonder at the universal potential of the United States.
However, to state the obvious, Senator Obama is a black man, and much of the world is racist, sad to say. Some leaders might see him as less than equal to their own skills and test our limits for that very reason. However, I think that this would have a small effect, and I suspect that Senator Obama would handle any such challenges handily.
So, as to the potential positive value of his presidency in terms of soft power, I give the Senator an 8 out of 10 (on my completely random scale.)
HARD POWER: It is hard to rate how a candidate might fare in terms of hard power because so much is out of his hands. It seems to me that the primary factor is experience, how energetic they are, and their common sense, all difficult things to assess from reports in the press.
The notion that Senator Obama is the least experienced of the three candidates is nonsense in my opinion. He has the second longest career as an elected official, though his time in the US Senate is the shortest. His early political career was spent in Chicago, famous for hard ball politics. However, his foreign affairs experience is necessarily limited by the relative shortness of his stay in the Senate.
Ultimately, part of the President's job, however, is to listen to his advisors in a way that demonstrates common sense. The Senator's advisory team is very distinguished and not filled with idealists, but rather their opposite. His most famous advisor, Secretary Brzezinsky, is an old cold warrior with about as cold an eye when it comes to American interests as they come.
In all, on a hard power scale then, I believe that Senator Obama would rate about a 5 out of 10.
HILLARY CLINTON
SOFT POWER: One might think that Senator Clinton's sex would send a positive sign to the rest of the world, about 50% of it in fact. However, I think that it would not be as powerful a signal as Senator Obama's for the simple reason that the United States is already regarded as the place where women have the most opportunities--with the possible exception of Scandinavia.
I think her value from a public relations perspective would come mostly from her being attached to her husband, who is extremely well-regarded in the world. Much of Europe, for example, would breathe a sigh of relief that sanity and amity had returned to America's foreign policy drivers.
On the other hand, Senator Clinton did vote for the war in Iraq, and her opposition to some of the other, more egregious, violations of American principles such as due process and the prohibition of cruel or unusual punishment are not well known. I don't think that her election would make the world that much more ready to take American negotiators at face value--many, perhaps a majority, would consider her a business-as-usual candidate, though one much more predictable and, thus, reasonable, than her predecessor.
Also, just as much of the world is racist, it is sexist, too, and there is some likelihood despite Senator Clinton's obvious no-nonsense approach to foreign affairs, that her limits would be tried by some were she President. Still, I believe that the Senator would be able to handle such challenges readily.
I thus give Senator a 5 out of 10 in terms of soft power advantage over the Bush Administration.
HARD POWER: As I stated above, I believe that Senator Clinton is the least experienced elected states person on offer. However, she will, just as Senator Obama, bring many very experienced foreign policy advisors with her, none of which are known for being fabulists when it comes to the rest of the world.
Moreover, her time in the White House, even if unelected, must of given her tremendous insight into how the levers of power inside Washington, DC, actually operate. The years in the White House and after have also brought the Senator into contact with nearly all the leaders of the world, and a real familiarity with the way that diplomacy operates.
I therefore give Senator Clinton a 6 out of 10 in hard power advantage over the current Administration on my completely arbitrary scale.
JOHN MCCAIN
SOFT POWER: Senator John McCain is a genuine war hero, with decades of experience in the Senate, who has opposed the use of torture and the denial of due process in Guantanamo from the beginning. He has firsthand experience of being a prisoner of war and I believe means every word when he says he means to put an end to those practices. He is an honorable man with years of experience in the military and I believe that he would be seen as a breath of fresh air by the world in this respect.
However, the Senator has stated that we will stay in Iraq for 10,000 years if necessary.(16) I don't think the Senator meant that in quite the way it has been repeated, he said at the time on Face the Nation that what he believes Americans are concerned about is having our troops face the brunt of the conflict. However, the world is not likely to give the Senator much slack in terms of these sorts of statements, and I believe they will think that he is in many ways the business-as-usual candidate. Perhaps the one most likely to spread conflict in destabilizing ways.
Although the Senator is getting on in years, much of the world respects the elderly much more than we do in the United States, sad to say. I think his age would be a net plus, especially in Asia, though it is given short shrift domestically. He is unlikely to be tried by foreign adversaries, who likely remember that President Reagan was fairly elderly as well.
Therefore, in terms of his advantage over the Bush Administration in soft power, Senator McCain is decidedly mixed, and I give him a 3 out of 10. Anyone would be a welcome relief from the current Administration, but to a large extent he will be seen as business-as-usual.
HARD POWER: The breadth of Senator McCain's experience is undeniable, though he has never served in an executive branch. He has knowledge of the world, and nearly 30 years in Washington, DC, must have imparted a deep understanding of how the levers of power operate.
I therefore give him a 8 out of 10 on a hard power scale.
RELATIVE ADVANTAGES OF SOFT VS. HARD POWER
Everyone has to make their own determinations about the relative advantages of soft vs hard power, though I do believe that in the final estimation of competing nations hard power is the decider.
However, I do not think that Presidents have much effect upon hard power outside of their decisions on how to wield it. Economies do not run on a timetable keyed to Presidential elections. Our military will be the most powerful in the world for the foreseeable future, no matter our current strategic position.
The primary consideration, in terms of geopolitical effect, of our Presidential candidates, then, is soft power, and Senator Obama is the clear winner in that category. If it seemed that he was not energetic or did not have enough common sense to use our hard power wisely, then he would not be the best on offer. But, solely in terms of foreign affairs, I believe he would have the best effect in terms of our national interests.
Finally, I believe that all the candidates would make great presidents and am not sure that foreign affairs should be the deciding factor in choosing one or the other. But were it so, I believe that Senator Obama would be the most rational choice.
I am not an insider, and so I read the papers, watch the networks (more like Jon Stewart, but OK), and poke about on the internet to get my news.
Just like most folks, I make my judgments about what's going on in the world on the basis of this information. This blog is an attempt to record some of them.
Because I've had some experience in international affairs, I might have a few counterintuitive reads on things that others might find interesting--or at least I hope so.
But, caveat emptor, since I have no inside information, the best I can do is assume:
a) that the actors being analyzed are behaving rationally, and
b) that the facts as they are reported in open sources are pretty much the facts.
"All sciences are now under the obligation to prepare the ground for the future task of the philosopher, which is to solve the problem of value, to determine the true hierarchy of values."
Posts
