Flight of the Eagle: The Grand Strategies That Brought America From Colonial Dependence to World Leadership (129 page)

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Authors: Conrad Black

BOOK: Flight of the Eagle: The Grand Strategies That Brought America From Colonial Dependence to World Leadership
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Outwardly undismayed by the failure of his nation-building effort, George W. Bush vastly exceeded the humdrum confines of his normal limited grasp of grand strategy and its domestic political execution with the most brilliant foreign policy stroke of any president since Ronald Reagan came up with SDI as a means of fragmenting the self-confidence of the Soviet leadership. He sacked Rumsfeld right after the congressional midterm defeat and brought in one of the ISG members, former CIA chief Robert Gates, a chum of the president’s father, to carry out a policy that was a 180-degree reversal of the inter-leg-tail retreat the ISG was proposing. The ISG report was revealed on December 12, 2006, and on January 12, 2007, the president announced a “surge,” the reinforcement of the U.S. forces in Iraq with an additional 30,000 soldiers—as well as, though it was not publicly announced, a change in campaign tactics, based on greater cooperation with and reward for the tribal and regional chieftains of Iraq. By rejecting his father’s friends’ confession of failure and plucking one of its advocates to conduct a diametrically opposite policy, George W. Bush showed not only a Machiavellian sense of irony but the highest political courage and, since the policy actually worked, a blinding and unsuspected gift of statesmanship.
The surge was a success and control of the country increased quickly and the level of violence subsided equally quickly, and Bush was able to withdraw the additional forces by the time he left office in January 2009. The Democrats, who had overcommitted themselves to failure in Iraq, had to retrace their steps. George W. Bush was so inarticulate and had so strained public credulity and indulgence by this time that he gained little immediate credit for successfully reversing policy and changing the executants of it, but his action salvaged a respectable outcome of the mission from the stomach of ignominy, though it did not redeem all the bumptious hyperbole about the apotheosis of democracy. The question remained of whether Iraq would be a durable, secular, even slightly democratic confederation, or would fragment or degenerate into a corrupt despotism, even one subject to unsuitable Iranian influence.
4. THE GREAT RECESSION AND BARACK OBAMA
 
By this time, other grave problems had descended. The U.S. current-account deficit over the previous five years had ballooned to a cumulative total of over $3 trillion and was running at about $800 billion per year. Much more immediately sinister was that the Clinton embrace of the building trades and real estate speculators in the name of greater family home ownership, by ordering continued minimal interest rates and mandating residential mortgages unsecured by any equity and linked to irrationally inflated housing values, abruptly exploded with a report heard and felt round the world.
In the autumn of 2008, almost the entire private-sector-lending banking system of the Western world, except for prudent Canada, was instantly insolvent; the depositors were guaranteed, but the shareholders were at the wall, waiting for the fusillade. One of the recently retired leaders of the world’s largest financial group, Citicorp, explained that “when the music’s playing, everyone has to dance.” Insurance giant AIG, already bedeviled by the New York attorney general, just elected governor, had to be rescued for issuing immense dollar quantities of insurance against default by these worthless “subprime mortgages.” The requirement for monthly asset revaluations by most financial companies assured the triumph of short-sellers, as companies that were stretched to the 30–1 ratio of debt-to-asset values were steadily issuing equity at crashing prices to maintain their ratios.
The president’s tocsin was “The sucker could go down,” referring not to the electorate that had twice (or at least the second time) placed him in the world’s greatest office of state, but to the $14-trillion U.S. economy. Though an inelegant formulation, hardly worthy of the proportions of the crisis, it was an accurate summation. Successive U.S. administrations had kept interest rates at negligible levels and encouraged consumption as well as residential home-buying (which in practice often meant individuals buying batches of homes with no equity commitment and low-interest mortgages, selling them when they went up in market value, and abandoning them and surrendering the keys when they went down). It was a political free lunch for Clinton (and even Bush), as they could speak of increasing home ownership at no apparent cost to the taxpayer. The American consumers had carried the luxury-goods industries of France and Italy and the engineered-products industries of Germany and Japan on their backs for decades, while American manufacturing and nearly 60 million jobs were outsourced to cheap-labor countries even as up to 20 million undocumented and poor migrants were tacitly allowed to enter the country to perform menial tasks.
The Clinton-Bush lack of rigor and discipline in the country’s international accounts and regulatory standards, lassitude in immigration, and encouragement of consumer and municipal and state debt accumulation rolled over the world like a tidal wave, and the whole financial structure of America and Europe was instantly revealed in its ghastly infirmity. Most of the American automobile industry, which had conceded $30,000 of union pension and health-plan benefits for every car manufactured while producing clunkers instead of cars worthy of great trademarks like Cadillac, Lincoln, and Chrysler that had been respected everywhere in the world, was living off continued tariff protection for trucks and now went into bankruptcy at the speed of the contestants in the Indianapolis 500. Arizona had sold the state Capitol on a lease-back; states were releasing prisoners (in itself a good thing in what had become a carceral nation, but not for the right reasons). Suddenly, America had its pockets turned inside out and everything was crumbling.
And there were unusually worrisome aspects to the crisis. No one—bankers of all kinds, from the Federal Reserve to the lending and merchant banks; industrialists and academic economists (with a couple of exceptions); financial journalists, politicians, and Treasury officials—had foreseen what was coming. Not only was the country bust, and its private sector largely bust, and much of the population personally very stretched, but the mystique of American capitalism had been vaporized. The whole architecture of the American economy—based on consumer appetites and an addiction to the service industries (over $1 trillion a year in legal billings), on essentially superfluous spending that was a partially self-imposed taxation on the whole private sector, and on the unsustainable snobbery of preferring to work in skyscraper offices rather than in light, much less heavy, industry—wobbled. And even in the extreme winter of the problem, during the election campaign of 2008, almost no one said anything sensible about the proportions, causes, and possible remedies.
It was in this fraught atmosphere that the second Bush era came to an end. The Democrats had a gripping campaign between Senator Hillary Rodham Clinton (now of New York), wife of the former president, and Senator Barack Obama of Chicago, the first (half) African American (and son of one Muslim parent) to make a serious run for the presidency. The Clintons were presumed to own the Democratic Party, as the last unambiguously and durably successful leaders of it since Roosevelt (though the Kennedys might have got there if JFK and RFK had not been assassinated). Senator Clinton won more votes and states in the primaries, but Senator Obama seduced his party and then the nation with a subtle formula that was never explicit, but was clear to the electorate: The great, white, decent, centrist majority of America, conscientiously guilty over the treatment of the African Americans after what Lincoln called “the bondsman’s 250 years of unrequited toil” followed by 100 years of segregation and a slow upward incline since, could be rid of its guilt and, as a bonus, never have to listen to the charlatan leaders of the African American political community who had unworthily succeeded Martin Luther King, if it only elevated Barack Obama to the headship of the nation.
The large number of ex-officio superdelegates to the Democratic convention in Denver were seduced by this tacit bargain, and Obama was the ideal candidate to offer it. Though his pigmentation was African, neither his physiognomy nor his inflection and cadences were ethnically distinct. He was eloquent and a fine, athletic-looking man. It was certainly long past time the United States ended any reticence about selecting a non-Caucasian as its leader. And many Democrats clearly resented the proprietary attitudes of the Clintons, and probably the indignities Bill Clinton had brought on the presidency with his indiscretions and his intimate flirtations with perjury, though it was, on its face, bizarre to punish his wife electorally for his infidelities. Obama was nominated, and oddly chose as his running mate the malapropistic senatorial wheelhorse Joseph Biden of Delaware. The Republicans met in St. Paul, Minnesota, 10 days later, and nominated Senator John McCain, who had run George W. Bush a good race in 2000. McCain had been a valiant POW in North Vietnam and was a cantankerous and often maverick senator, and generally a fairly orthodox conservative on most issues. For vice president, he took the comely (in the way of a sexy librarian) Alaska governor, Sarah Palin, a capable debater and campaigner, though exposed in interviews to be thin on some foreign policy areas especially. But she was an imaginative choice and brought a lot of attention to the Republican ticket and she more than held her own with Biden in their debate.
As the economy imploded, Obama did not have to do much, as the times, the
Zeitgeist
, and the contrast between his own youth (44) and fluency and the shopworn quality of his opponent were all strong advantages for the challenger. When the economic crisis cracked open, McCain at first declared, in (Herbert) Hooverese, that the economy was sound (which it wasn’t), on Monday; then excoriated corporate greed (as did almost everyone in both parties) on Tuesday; demanded the dismissal of the head of the SEC on Wednesday; suspended his campaign on Thursday to return to Washington for a White House emergency meeting about it on Friday; and said nothing at the meeting. He was a blunderbuss candidate whose time had passed, and all the stars were aligned for Obama. On election day he won, 69.5 million (52.9 percent) and 365 electoral votes from 28 states and D.C., and one from Nebraska (where three counties vote separately and directly choose a member of the Electoral College) to McCain’s 59.9 million (45.7 percent) and 173 electoral votes from 22 states. The Democrats retained control of both houses of Congress.
George W Bush left office quite unpopular and rather disdained for his bungled syntax, Texas mannerisms (as LBJ had been), and acoustically jarring diction (“the war in Eye-rack”). He had avoided a recession and led the nation effectively after the 9/11 attacks. He undoubtedly did terrible damage to the terrorist organizations, especially al-Qaeda, and the terrorist recurrences were much less serious and frequent than bin Laden and others had promised and many had feared. His next most important strategic initiative, and a very good one, was the July 2005 nuclear agreement with India, which broke the ice in that relationship and was topped up by a very successful presidential visit to India in March 2006. He was much disparaged in Europe, though so are most American presidents if there is any opportunity to do so (all the presidents since Roosevelt except Kennedy and, for a time, Nixon were frequently mocked in Europe). He had no idea of economic matters and completely abdicated when they suddenly boiled over. He did act generously to combat AIDS in Africa, but was often a somewhat dysfunctional president. He was far from great, but there have been many with fewer qualities and successes. And if Iraq finally emerges with any sort of reasonable power-sharing, his strategic influence, with democracy finally advanced by a major Arab country, could be quite positive and significant (though at time of writing, such an outcome did not appear the most likely).
Barack Obama chose his chief rival, Hillary Clinton, as secretary of state, and entered office with a broad mandate, though, as he did not have to say anything very precise in the campaign, an unspecific one. He continued, with apparent success, the withdrawal of forces from Iraq, but built up force levels in Afghanistan and revitalized the discouraged NATO effort there. And he approved the raid into Pakistan in 2011 that killed bin Laden, a long-sought and eminently justifiable objective of Americans. He was the most popular American president in Europe since Kennedy, but his appeasement of Iran, even as it hastened toward a nuclear military capability; his simplistically equivocal views on Israel; his apologies for some of his most esteemed predecessors (including, in different respects, Roosevelt, Truman, and Eisenhower); his promises of emulating European socialism; and his failure to produce any coherent Alliance policy all disappointed his countrymen. And four years of $1.5 trillion federal budget deficits took the national debt from the $10 trillion he inherited after 232 years of American history to $16 trillion in four years, although employment declined by five million jobs and there was no real economic recovery.
Unease grew that Obama did not really appreciate the highest qualities of America and was to some extent a factional and not national leader, as the office requires. His response to the economic crisis was a mighty Christmas cake of a “stimulus” package ($800 billion) for the delectation of the Democratic congressional committee chairmen, which did not prevent them from being dumped as the majority party in the House of Representatives in 2010 as the Republicans gained 66 congressmen. Obama’s great transformative measure was a terribly expensive and controversial health care bill that broadened coverage but increased medical care costs for many, that was misrepresented as cost-neutral, and that generated a bitter legislative battle that produced little benefit for the governing party. American medical care was excellent for the 70 percent of people who had full-service coverage paid for by their employers but very patchy for the 100 million others, and the cost of American health care was $4,000 per capita more than in other advanced countries (Australia, Canada, France, Germany, Japan, and the U.K., whose overall health care standards were not inferior to those of the U.S.). The federal budgetary deficit was anticipated to continue unabated for a decade, and had all the characteristics, if not the official description, of an annual money-supply increase of 100 percent over the money supply when Obama was inaugurated. A demeaning chicken game between the administration and the Republican House of Representatives unfolded over several years about the competing merits of raising taxes and reducing expenditures.

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