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Obama’s Change To the Past


The world is watching American elections like never before. After eight years of the Bush Administration, the prospect of change is palpable, especially in Europe, a continent that is clamoring to regain its relevance in the world. But the world should be cautioned: Be careful what you wish for.

On a recent trip to Europe, my suggestion that John McCain may well be the next president, drew pleas from Europeans that we Americans cannot let the world down. “It’s time for a change,” I was told, echoing the monosyllabic campaign message of Barack Obama.

Well, the biggest changes in foreign policy that Democrats are proposing come in the guise of economic policy. Both Clinton and Obama have threatened to pull out of the NAFTA free trade agreement unless their demands are met. That’s foolish pandering and Republican nominee John McCain is right to criticize them for this: What message would that send to our allies around the globe about how we treat our two closest friends in the global community?

Globalism is real. Although some Americans may see other countries around the world getting richer and think that wealth is coming – literally – at their expense, that is the wrong lesson to learn from the global economy. Instead, the growing interconnectivity of the global economy means that we must all care about each others’ well being and economic welfare because when anyone catches an economic cold, we all stand to suffer the sniffles.

In a speech to the Georgetown University Forum on Global Competitiveness, former Spanish President Jose Maria Aznar hit this point on the head when he pointed out the impact that America has on European economies through trade, investment and labor movement. The economic impact of the U.S. on Ireland is twice that of the impact in China. Anzar’s observation that Europe can only be an economic power, not a military one, requires that Europe keep its borders open to trade, and that America do the same.

At the same conference, former Clinton Assistant National Security Advisor Anthony Lake – now and advisor to the Barack Obama campaign – came to a different conclusion from the same set of facts. He started from the basic premise that we should not attack globalism or praise it, we should accept it. That’s refreshing coming from an Obama advisor but his solution seems to offer a return to the past, not a move forward.

Lake then spoke about the world’s problems – from competition over scarce commodities such as corn or oil, to Global Warming to the War in Afghanistan – and correctly pointed out that no one country can “solve” these problems alone. But even if the United States has the willingness to say “Yes We Can” and change our approach to these issues, Lake worries that the rest of the world – Europe, in particular – lacks the institutional support to make change happen.

When you look at Europe’s greatest institutional model – the European Central Bank – Lake seems to have a point. Since adopting the Euro, the less well-off countries of southern Europe have seen their economies flourish, but growth has come at the cost of inflation. Conversely, in northern Europe, the inflation that came after the initial adoption of the Euro has subsided, but they now suffer from the choke-hold of high interest rates and low growth.

My “Amsterdam Beer Index” – handy for the casual traveler trying to figure coss – show that the cost of a Dommelsch has gone from 2.95 Euros down to 2.50 and as low as 2.20 over the past three years, remaining steady in dollar terms, but also a clear (albeit anecdotal sign) of a slowing Dutch economy. Why? The ECB has chosen to forsake growth in order to fight inflation, at the cost of double-digit unemployment and growing unrest.

Militarily, Lake implied, Europe’s institutions are even worse off and they must be bolstered if they intend to cooperate with the United States in NATO and fighting the war on terrorism. Europe, the potential future Secretary of State alleged, has gotten a free ride from the U.S. during fifty years of the Cold War and eight years of Bush unilateralism.

The only conclusion I can draw from that is that after pulling out of NAFTA, the Obama Administration would try to re-militarize Europe. As someone who remembers what he learned about the last time protectionism and militarization were the global norms, I have to say that sort of change – a change to the past, not the future – isn’t exactly what we’re looking for. Is it?

Share  Posted by Scott Olin Schmidt at 8:59 AM | Permalink

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