Financial Times
October 27, 2004
America will always do the right thing, once it has exhausted all the alternatives - Winston Churchill
This US presidential race is no ordinary election. That is not because the outcome might heal the country's cultural, social and political divisions, generate harmony between the US and its allies or eliminate US economic vulnerabilities. What makes it significant is that it is a referendum on the direction George W. Bush has taken the world's "sole superpower".
In 1966, when I first visited the US, I was struck by the country's harmony. The response to the civil rights movement showed that Americans remained divided over race, though most realised that demands for racial equality ought to be met. Beyond that, however, the conflicts over class and economic systems raging in Europe were absent. McCarthyism was history and neither the role of private enterprise nor Franklin Delano Roosevelt's New Deal were debated.
Yet that harmony proved misleading. Divisions would soon erupt, under the pressures of the Vietnam war and the western social and sexual revolution of the 1960s. In his autobiography, former president Bill Clinton places the moment at the Democratic presidential convention of 1968, in the clashes between the supporters of Eugene McCarthy and the Chicago police.
"The kids and their supporters saw the mayor and the cops as authoritarian, ignorant, violent bigots. The mayor and his largely blue-collar ethnic police force saw the kids as foul-mouthed, immoral, unpatriotic, soft, upper-class kids who were too spoiled to respect authority, too selfish to appreciate what it takes to hold a society together, too cowardly to serve in Vietnam. . . . The fleeting fanaticism of the left had not yet played itself out, but it had already unleashed a radical reaction on the right, one that would prove more durable, more well financed, more institutionalised, more resourceful, more addicted to power and far more skilled in getting and keeping it."
This split did, indeed, end the hegemony of Roosevelt's Democratic party, which thereupon lost the support of the tough-minded Democrats we now know as "neoconservatives", many blue-collar workers and the old South. In the process, it turned the Democrats into what has often been an ineffective rabble. It also transformed the Republicans from the traditionally isolationist party of big business, country club conservatives and midwestern farmers into the potent mixture of economic libertarians, nationalists, Christian fundamentalists and social authoritarianism we see today. These wounds, so visible in this election, will not soon heal.
It is unlikely, either, that the outcome of this election will do as much to change US relations with Europe as many hope. With the cold war over, the divergences between American and European attitudes towards military force, the legitimacy and role of multilateral institutions, the causes of the Israeli-Palestinian conflict and even the "war on terror" are too deep to be readily bridged, whoever is in power in Washington.
If elected, John Kerry would demand more assistance from Europeans in Iraq, which the latter would find uncomfortable to oppose and difficult to grant. Mr Kerry would give Europe no veto over decisions to use force. The gulf between a military superpower and European pygmies will not be bridged. Nor will Mr Kerry bring the US into the Kyoto treaty, embrace the international criminal court, ratify the test ban treaty or, indeed, turn the US into the multilateralist pussy cat of European imaginings. On trade, he may well be more aggressively protectionist than Mr Bush.
Nor does the election promise any early removal of the economic vulnerability of a superpower that is increasingly living on borrowed money. On present trends, argues HSBC, the current account deficit could reach 8 per cent of gross domestic product by the end of the decade, up from just under 6 per cent today. This could also bring US net external liabilities to 90 per cent of GDP, against close to 40 per cent at the end of this year.
If such a vast increase in the external deficit were indeed to occur, it would be impossible to reduce the fiscal deficit, as both candidates promise, while enjoying the strong domestic demand that Americans expect.
On the contrary, unless the private sector were prepared to run a financial deficit far larger than at the peak of the bubble, in 2000, the fiscal deficit would explode. The dollar has to fall a long way from where it is now, if the current account deficit at full employment is to diminish. Only then could the fiscal deficit shrink. Neither side admits the extent of the economic vulnerability.
Nor does either party admit that there will need to be substantial tax increases at some point if Americans wish to enjoy both the services of a modern state and their overwhelming military preponderance. But the Democrats do at least lack this administration's faith in tax cuts and indifference to persistent deficits.
Why then is an election that may not change quite as much as many suppose also historic? The answer is that it will decide the face the US presents to the world. As Anatol Lieven notes, the terrorist attacks of September 11 2001 have fanned the embers of nationalism.* They have also turned the US into a democratic imperialist. The idea that the US should impose liberal democracy by force has appeal but is proving unworkable: every day makes it clearer that the Middle East is not post-1945 Germany.
This election will be the people's assessment not only of the administration's aspirations but also of their execution. Can the America that started a war on a false prospectus and perpetrated Guantánamo Bay and the humiliations at Abu Ghraib prison also be the admired leader of humanity? Can it exercise the benign influence its well-wishers desire?
No transformation is on offer, either within the US or in its international relations. But the re-election of George W. Bush would be significant, for all that. However small the margin might be, Americans would have ratified his path of militant exceptionalism. Rightly or wrongly, the rest of the world would view that outcome as America's declaration of indifference.
* America Right or Wrong (HarperCollins/Oxford University Press)