T
he mood across the nation and world for the past three-and-a-half months has been feverish expectation. The Obama administration, under a hail of fanfare and hope, made strong moves in its first two months on the issue that undoubtedly matters the most to the present electorate, the economy. Obama and Co. have lived up to their political promises, approving vast sums for a stimulus package, forwarding plans to buy toxic assets and creating new legislation on financial regulation. With these ambitious plans to turn the country around, the Obama administration has also pushed forward a newly revitalized foreign policy, which is steeped in the language of prudence, tact, direct involvement and international cooperation.
Despite the calls on the part of the Obama administration for these economic measures to be bipartisan, they have been voted in with minimal Republican support. The stimulus plan was roundly rejected by all the Republicans in the House and the Senate saw only two very moderate Republicans assent to Obama’s plan. Along with this refusal to cooperate, the Republicans have made their criticism of the Obama administration even more vocal. From tea parties to cocktail parties, Republicans are busy blasting everything that is Obama, using the possibility of economic failure to lay the groundwork for an electoral comeback in the future.
This is nothing unexpected. For years, the political game in the United States has been one of quick sound bites, unfair policy associations and a general lack of good common sense. However, the present state of the economy and foreign affairs makes this usually annoying political culture a much more dangerous thing. This is because a failure with the economy will assure the rejection of Obama’s foreign policy.
Economic policy is probably the most uncertain and misrepresented aspect of any American administration. In facing a recession of this magnitude, the policy recommendations that are being forwarded by top economists rely on the basic Keynesian model of demand. According to this model if there is a demand shock to the economy (in other words a lowering of consumer and investment demand) the government can put the economy back into equilibrium by adding to the money supply and either spending money or issuing tax cuts. The problem with this basic model is that it isn’t a universal equation. The model relies on certain assumptions about how the public will react to certain governmental measures. If, for instance, a tax cut is issued and the public, fearful of more hits to the economy, hides the money in their mattresses, then the policy will have failed to stimulate consumption and nothing will change. So this economic policy is not as much about mathematics and evaluations as it is about measuring the entropic movements of public confidence. This makes the chance of effectiveness of almost any economic policy a dice roll at best.
Now this difficulty in forming economic policy is problematic enough as it is. But what acts as a multiplier to this problem is how economic policy is misrepresented by politicians and used to disqualify other completely unrelated policies. Imagine, for a second, that the economic stimulus plan doesn’t work and the economy sinks deeper into depression. The Republicans, who have been licking their wounds since November, will jump on this chance to browbeat their liberal counterparts, claiming that if only they had been in charge of the stimulus plan and other various measures, things would have gone better. The defending Democrats would invariably take a large hit in the midterm elections, and the newly confident Republican-majority House would do its best to frustrate any other measure that President Obama would propose. This possibility is as realistic as it is bipartisan. President Obama, message of hope or no, used the economic meltdown to criticize Bush “economic policy,” which helped him defeat McCain. There is every reason to think that if Obama fails to fix the economy, he will be a one-term president and his political capital will be destroyed, he has already said as much.
The destabilizing effects of this possibility are difficult to bear. A complete destruction of Obama’s political capital will castrate his foreign policy. At this point in time the Iranians, who have good reason to be wary of America’s good intentions, will see a loss of Obama’s political initiative as a betrayal of his former overtures. They might react to this by putting their nuclear ambitions on overdrive. North Korea, seeing that he U.S. would not have the political capital to restrain its own nuclear ambitions, could increase its arsenal and begin threatening neighboring countries. And, finally, Israelis and Palestinians, who have been waiting with bated breath at any new policy change in Washington, will most likely react to this lack of initiative by hardening their stances and jockeying for land and human capital all the harder.
These possibilities all seem like terribly morose consequences of a failed economic plan. And the fact that it is our own political system which can make this happen is a black mark on our society. This consternation begs a question: How can we stop this from happening? The answer, to be horribly corny, is that changing this reality starts with us. It is the American populace that swoons at these heavy-handed political tactics broadcast so vividly in the media. If we as a society could see through the blatant hypocrisy and misrepresentation, these tactics would lose their effect. The problem is that creating awareness of these faults in the American political system takes time. Most of our country relies on these small pockets of information for their votes, being too busy with more locally necessary things to read realclearpolitics.com every day. The difficulty of this task of societal reform is not impossible and should be undertaken with the necessary vigor. But, for the present, we must resign ourselves to the fact that this is the way it is, and pray that the economy, and by extension our new foreign policy, will survive the storm.