Book Review – Superpower: Three Choices For America’s Role In The World by Bill O’Grady of Confluence Investment Management
This is the first formal book review we have conducted as a Weekly Geopolitical Report, although we have leaned heavily on books or papers for much of the content in other reports. We believe this book is important because of its message and due to the proximity to the 2016 elections.
Our subject this week is a new book titled Superpower: Three Choices for America’s Role in the World, by Ian Bremmer of the Eurasian Group. Bremmer is a well-known political scientist and author who writes often about geopolitical issues. His new book comes at an important juncture in American history. At some point, America’s leadership will need to select a workable foreign policy for the post-Cold War world, which involves determining what America will do about the superpower role. This is a topic we discuss often and, after reading this book, view Bremmer’s analysis as critically important in the examination of America’s foreign policy. In this report, we will review Bremmer’s book, starting with his premise that none of the presidents since the fall of the Berlin Wall have developed a coherent foreign policy.
We will then focus on his three models of exercising the superpower role. From this analysis, we will examine Bremmer’s choice in the matter and offer a critical assessment of his opinion. As always, we will conclude with market ramifications.
The Lack of Direction
Bremmer begins his book with a short laundry list of the problems facing the American president. The rise of China, the lack of consensus among our European allies, the return of Russia, the instability of the emerging world and the growing chaos in the Middle East are major worries for whomever occupies the Oval Office. To date, no president has created a working foreign policy to manage these challenges. Bremmer makes it clear that U.S. foreign policy is in decline. At the same time, domestic America itself is in reasonably good shape. Demographically, due to America’s relative openness to immigration, the U.S. is younger than other developed nations. We face no serious dangers from our immediate neighbors. Although Mexican drug gangs are a police problem, it is inconceivable that they could ever threaten the Federal government. The Canadian border remains remarkably open and a conduit for trade. Contrast that with Europe, which is being overrun with refugees from North Africa and the Middle East, and faces a growing threat from Russia. In the Far East, populations are aging rapidly, even in some of the emerging economies. Relations between Japan and China remain tense and China is trying to expand its military and commercial footprint deeper into the South China Sea. India remains at loggerheads with Pakistan.
Post-Cold War Policy History
Despite America’s advantages, or perhaps because of them, policymakers have been adrift since the end of the Cold War. President George H.W. Bush presided over the end of the Cold War and successfully managed the First Gulf War by building a broad coalition against Saddam Hussein. He artfully avoided the temptation to march to Baghdad, realizing that overthrowing the Iraqi leader would (a) break his coalition, and (b) require the occupation of Iraq, an outcome that would have likely been expensive on many levels.
President Bush’s reward for winning the Iraq War and ending the Cold War was to be only the second president in post-WWII history to lose reelection. Americans were more concerned with the domestic economy and elected President Bill Clinton to focus on the U.S. Much like the British after WWII, who turned out Winston Churchill in favor of Clement Attlee, American voters, in the midst of the 1990-91 recession, wanted a leader to focus on the domestic economy.
Despite this mandate, Clinton, like other American presidents, wanted to promise an expansive foreign policy, too. He made a series of missteps. He expanded the humanitarian intervention into Somalia that led to the “Black Hawk Down” incident. This event prompted a hasty retreat that has led some to speculate that the emerging al Qaeda saw Americans as unwilling to maintain operations in the face of casualties. This belief may have emboldened jihadists. The al Qaeda attacks on the U.S. embassies in Kenya and Tanzania in 1998 and the 2000 attack on the U.S.S. Cole occurred on Clinton’s watch.
The decision to expand NATO in 1999 was also problematic. Although former Warsaw Pact nations clearly have the right to join the Western Alliance, allowing the expansion only makes sense if the U.S. is willing to defend these nations against Russian aggression. Clinton appeared to have calculated that Russia was so decrepit that it could not respond. The NATO intervention in Kosovo made that position clear to the Russian leadership and led Boris Yeltsin’s successor, Vladimir Putin, to vow to restore Russian “honor.”
A third area that Clinton miscalculated was in his China policy. Although Candidate Clinton assailed President Bush for being too accommodative to China, President Clinton granted China “permanent normal trade relations,” ending the annual Congressional debate on China’s trade status with the U.S. Clinton also supported China’s entry into the World Trade Organization. Clinton believed that growing commercial ties would eventually bring political liberalization to China. Despite China’s rapid growth and expanding foreign trade, there is scant evidence that the Communist Party of China is prepared to relinquish power and democratize.
So, Clinton fell into a war in Somalia because people were in danger, retreated in such a manner as to embolden terrorists and created conditions to antagonize Russia; not a good start to the post-Cold War era. Still, because the U.S. was a unipolar power, these gaffes did not critically undermine U.S. power.
Candidate George W. Bush ran on a foreign policy platform of “humility.” However, his foreign policy was forever changed by the terrorist attacks in New York and Washington on 9/11/2001. Bush rapidly shifted to an open-ended war against terrorism that included invasions of Afghanistan and Iraq. Military operations against the former were designed to disrupt al Qaeda’s operations and bring Osama bin Laden to justice, either dead or alive. These operations were backed by Article 5 of the NATO treaty.
The war in Iraq was much more problematic. The U.S. tried to make the case at the U.N. that Iraq had a dangerous program to build weapons of mass destruction and was in league with al Qaeda. The U.N. Security Council disagreed and would not support a U.S.-led attack on Iraq. The Bush administration built a “coalition of the willing” and launched a war to oust Hussein and democratize the region. The wars didn’t go well. Iraq was a colonial construct of a nation that, without a strongman in place, rapidly devolved into a civil war, with the U.S. caught between the Kurds, Sunnis and Shiites. The Afghan War became a stalemate as the Taliban moved freely into Pakistan and NATO struggled to build a workable government.
The wars were long, inconclusive and expensive. In addition to all the military spending, President Bush also made aggressive tax cuts early in his first term and passed an expensive expansion of the Medicare drug benefit. Fiscal deficits ballooned.
The end of Bush’s term was punctuated by the 2008 financial crisis,