The Radical Moment

We'll have a stimulus package eventually and it will probably offer a short-term remedy for the economy. The Congressional Budget Office report the Republicans love to misuse says that the package will have an effect by the second half of this year and take hold in 2010. But every other item on Obama's agenda will be thwarted, including health care reform.

You have to like Paul Krugman for soldiering on around the TV shows trying to educate the public. He is right; the compromise package omits some of the most important elements for a true recovery. The one both of us agree on is the $50 billion for state stabilization, which I think is essential for the country to get back to health.

As for TARP II or whatever Monday's offering is going to be called, it does not thrill my jets. The testimony of Elizabeth Warren, the Harvard Professor hired by Congress to oversee the bailout, was depressing. Bush's Treasury Secretary Paulson basically lied to Congress saying he was getting a $1 worth of warrants, assets, etc. for every buck being put into the banks. Actually it's like $.66. The banks have stolen us blind.

The economic crisis provides an opportunity for the United States to correct its fiscal ways and to invest in the development of the nation. But, given the political landscape, it doesn't look possible. The next Republican assault will be on Social Security and Medicare. This is a $53 trillion unfunded entitlement obligation that will explode on us unless dealt with in the next two years. I've already said Social Security is a no-brainer to fix but a solution to Medicare demands a total revamping of the American health system so as to reduce its final price tag for future generations.

Republicans always revert to fiscal conservatives when out of power. The Reagan deficits were strategic for the dual purpose of : bankrupting the Soviet Union; and limiting the growth rate of social spending. The Bush deficits had no such strategic purpose like most of his policies. The Republicans felt that Obama would come in and triangulate like the Clintons. The enormous deficits run up under Bush would normally require the Democrats again postponing their most favored social programs, except this time Bush blew a hole through the hull and the ship is sinking. The tamed policies of the Clinton years simply can't correct the situation.

The situation requires a radical re-thinking of this nation's priorities and large investments in the development of the country. This may still happen as events unfold over the next two years as the real impact of the Bush years is felt on the average citizen. But don't count on it.

One area which will need re-thinking is the immense commitment to maintaining what is now really an empire without benefits. Under both Clinton and Bush, the American military became a type of presidential pretorian guard, which does his bidding and which operates with very few checks on where it operates. The United States has over 700 bases, sometimes only a single radar dish abroad. No one in Washington ,including Barack Obama, is questioning this extraordinary projection of power and the ruinous effect it will have within a few short years on our economy.

After 9/11, the Bush Administration always talked about the "Long War", which we must wage against Islamic fascists, terrorists, choose your term. This we were told would last at least a generation. But at no time did we get the George Kennen memo outlining a containment theory or any other substantial document, which would suggest a strategy about this Long War. Also, there was no information policy about educating the American people about this so-called Long War.

Sadly, this was the product of romantics, who wanted a noble challenge like another Cold War. Without a strategy, the Bush Administration embarked on the largest expansion of the national security state in our history, even overshadowing FDR's effort during WWII. The real kicker here was the awareness there was no point of victory--no collapse of Nazi Germany, no transformation of the Soviet Union. So it became literally a blank check for expenditures on anything remoting related to terrorism.

The intelligence failure over Iraq will hang like a radioactive cloud over foreign policy for years. It becomes difficult to restore any credibility to the United States. Even our closest friends will have to be skittish about any of our assertions in the future. It's fine for Obama in his campaign speech to the Germans to call on more involvement of the Europeans in Afghanistan and for Joe Biden say" We're pushing the reset button on American foreign policy". But the results will be negligible in generating any further European troops for Afghanistan or European involvement in any other American military capers.

The Obama Administration at best is going to fine-tune the foreign policy they inherited. But even that is facing resistance from entrenched interests of the national security state. Look at the clamor over closing Gitmo, the fight over the deadine to withdraw from Iraq and now the problem that there is no existing strategy in Afghanistan.

During the campaign, everyone proudly proclaimed that the new President will be tested by an international crisis. The Obama transition team even tried to game this out, expressing worries that the United States no longer has the resources to bail out a country that suddenly collapses. They were thinking about Pakistan, but it may well be Mexico. While I believe both will happen, the international crisis will be how to manage the collapse of European economies and a set of testing actions by Russia.

Already we had the phoney Georgian issue, made memorable by Senator McCain's address to the nation where he pretended he was the President; and also made memorable that day by cans of peas attacking him in the grocery store. No one has revisited how those events came about where Russia counter-attacked Georgia's forced seizure of South Ossetia. That the United States guaranteed Georgia's protection and that the foreign policy adviser to McCain was the country's lobbyist and verbally assured the Georgia President of America's protection triggered Georgia's actions, which naturally generated Russia's response. It is a great way to trigger a truly global war.

This is really the archetype for the first international crises to face Obama. While the American people are pretty much played out on the Muslim terrorist game, the Great Bear attack is "go" for generating support for the Republicans. And it will be that cynical. And Russia will play it also. We will hear the calls of a new Sudatenland.

Unfortunately, we still have no over-arching geostrategic vision. And we will be compelled to develop one in a crisis. The problem with this is that we are at a time where America must pull back and rethink its global commitments before it literally bankrupts itself.