Author Topic: FOR OBAMA, A WIN AT HOME MEANS A WIN ABROAD  (Read 2331 times)

Offline Reginald Hudlin

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FOR OBAMA, A WIN AT HOME MEANS A WIN ABROAD
« on: April 21, 2010, 12:43:59 am »
Everybody Loves a Winner
 
By THOMAS L. FRIEDMAN
Published: April 20, 2010
I’ve been thinking about President Obama’s foreign policy lately, but first, a golf tip: I went to Dave Pelz’s famous short-game school this winter to improve my putting and chipping, and a funny thing happened — my long game got better. It brings to mind something that happened to Obama. The president got health care reform passed, and it may turn out to be his single most important foreign policy achievement.

In politics and diplomacy, success breeds authority and authority breeds more success. No one ever said it better than Osama bin Laden: “When people see a strong horse and a weak horse, by nature they will like the strong horse.”

Have no illusions, the rest of the world was watching our health care debate very closely, waiting to see who would be the strong horse — Obama or his Democratic and Republican health care opponents? At every turn in the debate, America’s enemies and rivals were gauging what the outcome might mean for their own ability to push around an untested U.S. president.

It remains to be seen whether, in the long run, America will be made physically healthier by the bill’s passage. But, in the short run, Obama definitely was made geopolitically healthier.

“When others see the president as a winner or as somebody who has real authority in his own house, it absolutely makes a difference,” Defense Secretary Robert Gates said to me in an interview. “All you have to do is look at how many minority or weak coalition governments there are around the world who can’t deliver something big in their own country, but basically just teeter on the edge, because they can’t put together the votes to do anything consequential, because of the divided electorate.” President Obama has had “a divided electorate and was still able to muscle the thing through.”

When President Dmitri Medvedev of Russia spoke by phone with Obama the morning after the health care vote — to finalize the New Start nuclear arms reduction treaty — he began by saying that before discussing nukes, “I want to congratulate you, Mr. President, on the health care vote,” an administration official said. That was not just rank flattery. According to an American negotiator, all throughout the arms talks, which paralleled the health care debate, the Russians kept asking: “Can you actually get this ratified by the Senate” if an arms deal is cut? Winning passage of the health care bill demonstrated to the Russians that Obama could get something hard passed.

Our enemies surely noticed, too. You don’t have to be Machiavelli to believe that the leaders of Iran and Venezuela shared the barely disguised Republican hope that health care would fail and, therefore, Obama’s whole political agenda would be stalled and, therefore, his presidency enfeebled. He would then be a lame duck for the next three years and America would be a lame power.

Given the time and energy and political capital that was spent on health care, “failure would have been unilateral disarmament,” added Gates. “Failure would have badly weakened the president in terms of dealing with others — his ability to do various kinds of national security things. ... You know, people made fun of Madeleine [Albright] for saying it, but I think she was dead on: most of the rest of the world does see us as the ‘indispensable nation.’ ”

Indeed, our allies often complain about a world of too much American power, but they are not stupid. They know that a world of too little American power is one they would enjoy even less. They know that a weak America is like a world with no health insurance — and a lot of pre-existing conditions.

Gen. James Jones, the president’s national security adviser, told me that he recently met with a key NATO counterpart, who concluded a breakfast by congratulating him on the health care vote and pronouncing: “America is back.”

But is it? While Obama’s health care victory prevented a power outage for him, it does not guarantee a power surge. Ultimately, what makes a strong president is a strong country — a country whose underlying economic prowess, balance sheet and innovative capacity enable it to generate and project both military power and what the political scientist Joe Nye calls “soft power” — being an example that others want to emulate.

What matters most now is how Obama uses the political capital that health care’s passage has earned him. I continue to believe that the most important foreign policy issue America faces today is its ability to successfully engage in nation building — nation building at home.

Obama’s success in passing health care and the bounce it has put in his step will be nothing but a sugar high if we can’t get our deficit under control, inspire a new generation of start-ups, upgrade our railroads and Internet and continue to attract the world’s smartest and most energetic immigrants.

An effective, self-confident president with a weak country is nothing more than a bluffer. An effective, self-confident president, though, at least increases the odds of us building a stronger country.


Offline DRobinson

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Re: FOR OBAMA, A WIN AT HOME MEANS A WIN ABROAD
« Reply #1 on: April 21, 2010, 08:32:49 am »
Friedman is right. President Obama needs to use the momentum gained from the health care vote, to focus like a laser on jobs & the economy. If he does that, the Dems can hold seats in the mid-term elections, giving the President the time and space to get his larger agenda passed, after the election.

If Obama spends his newly earned political capital on anything but the economy, the result will be lost congressional seats.

Offline Reginald Hudlin

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Re: FOR OBAMA, A WIN AT HOME MEANS A WIN ABROAD
« Reply #2 on: April 21, 2010, 09:23:10 am »
Agree 100%.  The question is, how much can affect and how should he go about it?  WPA-style works programs?  More cash-for-clunkers type deals?  Something else?

Offline DRobinson

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Re: FOR OBAMA, A WIN AT HOME MEANS A WIN ABROAD
« Reply #3 on: April 21, 2010, 10:16:50 am »
Real jobs, sustainable jobs, come from innovation and economic expansion. Government spending on programs like WPA, or cash for clunkers is a short term solution to a longer term problem.

There are times, when government needs to step in with spending/programs to pull the economy from a spiraling free fall. But with the economy now relatively stable (compared to 18 months ago), the focus has to be on private sector job creation.

For the government to spend a dollar, they have to collect it in taxes, or borrow it - to be repaid with future tax revenues. President Obama’s chair of his council of economic advisors, Christina Romer, recently completed a study that shows, for one dollar collected in taxes, three dollars is taken out of private sector spending. So increasing taxes, to increase spending, could throw our already precarious economy, deeper into recession. In my opinion, the risk associated with this type of solution is too high.

The Obama administration has correctly pushed for hiring tax credits. Those credits can be expanded and tailored to encourage expansion of specific sectors of the economy (high paying, forward looking jobs), but it is unlikely that, significant, industry specific credits would work or be politically feasible.

As unpopular as it is, lower marginal tax rates for businesses and entrepreneurs is the solution with the highest likelihood of sustainable success.

The rate of unemployment + discouraged workers no longer looking for work + part time workers who want to work full time, is over 17% nationally. For African Americans, that number is way north of 20%!

Until those folks are working in real jobs, that will be there long after the completion of next WPA(like) project, the economy ain’t fixed! That kind of sustainable economic health will have to come from a vibrant growing private sector.

So the answer to your question, “… how should he go about it?” is - encourage private sector hiring & growth, through policies and lower taxes, that bring off-shore jobs back to the US, stimulate innovation, filing of new patents, etc.


Offline Reginald Hudlin

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Re: FOR OBAMA, A WIN AT HOME MEANS A WIN ABROAD
« Reply #4 on: April 22, 2010, 01:36:38 am »
Wasn't our last big economic bubble caused by the tech boom?  Can it be said that was created by tax cuts?  Or other factors? 

And even with tax cuts, will those be enough to bring jobs back from overseas? Or are cheap labor prices, etc. too much to compete with? 

Offline DRobinson

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Re: FOR OBAMA, A WIN AT HOME MEANS A WIN ABROAD
« Reply #5 on: April 22, 2010, 06:57:46 am »
The “tech bubble” was a classic study in human nature. Remember Alan Greenspan coining the phrase “irrational exuberance”?

In the early 1600’s, there was a parallel to the tech bubble; the Dutch Tulip Bubble (really!). In 1637, the market for tulip bulbs got so overheated that a single tulip bulb could be sold for more than ten times the annual income of a typical Dutch worker. The frantic market for tulip bulbs got so crazy that tulip bulbs were traded like stocks. It got so extreme that futures contracts were even created for tulip bulbs (think Goldman Sachs today).

What we think of as the tech bubble, was really no different from the tulip mania of the early 17th century. It had less to do with tech and more to do with hysterical demand for stocks. At the height of the tech bubble, stocks of “tech” companies were gobbled up by speculators, and would be speculators, at prices with no basis in reality. People bought tulip bulbs in the 1600’s and tech stocks in 1999, because they believed the prices would continue their wild asscent, and they would profit.

The trajectory of the tech bubble was the same as the tulip bubble, the housing bubble, and dozens of other historical examples.

As far as bringing lost jobs back to the United States, you are right, it is more complicated than just cutting taxes. Some jobs are never coming back – think steel workers. Tax cuts can’t level the playing field between US workers and competing labor in emerging markets, but they can bring back jobs on the margin. And more importantly, tax cuts can spur innovation that creates new jobs (think green energy).

At the end of the day, Friedman’s premise is right; Obama has momentum coming off the health care vote. My hope is that our President will use that momentum to fix the economy. If he does that first, he will have enough momentum to pass the remainder of his agenda, more easily than you could have sold tulip bulbs in January of 1637 (the month before the bubble burst).