Not having a party

It’s nearly three years since Barack Obama won the US presidential election. To many people outside America, this marked what people assumed would be the return of ‘normal’ politics to America. For non-Americans it had been almost impossible to understand George W. Bush and his retinue; they seemed to be driven by various impulses that, for them, signified US influence and leadership, but which to the rest of the world appeared to be somewhere between zany and dangerous. The Bush administration took on almost unimaginable costs, ranging from the various wars to massive (and unfunded) tax cuts.

Oddly enough, right now US politics are convulsed by two outputs from the Bush era: the amazing deficit that his policies bequeathed the American people, and the ‘Tea Party‘ movement that is a spin-off of sorts from his ideological positions. This dual legacy is so odd in part because the Tea Party are treating the deficit as an Obama creation, which it actually is not. As the graph in this article shows, overwhelmingly the over-spending is a creature of the Bush government, whereas Obama has been relatively frugal; indeed Obama’s main expenditure relates to issues (or wars) that were put in play by Bush.

If you visit America, as I have been doing these past few days, you get a very direct sense of how US politics are now anything but normal. The debate here about raising the debt ceiling is so totally irrational as to have mind-bending attributes. A solution to the by now somewhat real threat that America could default on its financial obligations (though probably not its loans) is held in abeyance by driven ideologues who, when you listen to them being interviewed, clearly do not have an even basic understanding of the economic issues involved. They share the Republican Party with an established leadership that is increasingly aghast at their antics. On the other side is a president who may not be acting as decisively as the situation requires. As the outcome of this drama will affect us all, it has rather chilling properties.

The United States is, and notwithstanding occasional exaggerated predictions about the growth of the BRIC countries will continue to be, the leader and trend-setter of the global economy. This makes it rather important that its economic policies are the subject of rational debate and decision-making, guided by informed analysis. The current battles being fought on Capitol Hill won’t do. It is time to stop humouring the Tea Party ideologues, and to stop pretending that their arguments merit real debate. There are perfectly legitimate differing positions on the economic crisis, but they need to be based on an understanding of the issues. It is time for America to end the ‘tea party’ and to let the adults take over.

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The search for a new economic order

Ever since the wheels began to come off the global economy last year, there has been a lot of chat about whether there should be a new model of economic policy, both for global trade and within individual countries. Furthermore, all this happened while, in an iconic moment, the Bush administration in the United States was replaced by that of Barack Obama. Much of the commentary focused on the assumption that we were experiencing a major crisis of confidence in capitalism, and that what would now happen was that free markets would be replaced by a highly regulated system. The recent G20 summit in London spent some time on all this, with the French President, Nicolas Sarkozy, in particular emphasising the need for regulation (and threatening to walk out if his approach was not adopted).

There are a lot of lazy assumptions in all of this. One of them is that the world economic order before last year was based on totally unfettered markets. Furthermore, the view that George W. Bush was a free market leader is also highly questionable; his administration was economically one of the most interventionist in US history, and presided over an intricate set of regulations, particularly post-Enron. In fact, it could be asked whether the experience of the past few years tends to show that regulation actually does not always work very well. After all, after the events at Enron and Worldcom, people were led off in handcuffs, and yet this appears to have had a minimal effect on the big bonus earners in parts of the financial sector.

Nobody can reasonably presume that nothing needs to change now. Clearly it does. But it must be questioned whether the Franco-German view of regulation (which may be no more than bureaucratisation) is the right way to go. Setting up new regulatory offices whose main effect will be to slow down decision-making and ensure it is increasingly risk-averse is almost certainly not the answer. On the other hand, encouragingthe  people holding the world’s financial levers to take crazy decisions, sometimes based on nothing more than their aspirations for another bonus is also not right. It seems right that we must look at ways in which the conduct of key persons in industry and in the financial sector can be guided into ways that benefit society.

But that won’t bring about recovery. Perhaps the newly unveiled strategy of the UK’s Secretary of State for Business, Enterprise and Regulatory Reform, Peter Mandelson, represents an interesting basis on which to consider a new role for governments to help steer both local and global markets. His strategic document published today – New Industry, New Jobs – sets out a more activist agenda for government in order to identify and support growth areas that can generate employment and prosperity. There is also an interview in the London Independent newspaper in which he explains both the opportunities and risks. In short, what is being suggested here is that growth does need at least some element of strategic planning which looks at future trends and needs and identifies areas to be targeted for growth and support. That may be a more urgent exercise than coming up with even more intricate models of regulation.

Memories in cyberspace

If last week, on January 20th, you had (let us say, at 4.30 pm Irish time) opened www.whitehouse.gov on your browser, you would have seen the final messages of the George W. Bush administration on the web. An hour later, and you would have seen the welcome to the new world of United States under Barack Obama. If for some reason you were interested in going back to the Bush material – and after all, it’s a free country – you would not have been able to do so. It was gone; not re-filed in some way, but gone for ever. All that remains is a page on George W. Bush himself, in the part of the site that gives information on past Presidents.

The point I am making here is not that you should show nostalgia for the last eight years, but rather that if we see the internet as a valuable archival resource, it is a somewhat insecure one, and some information (even if you consider it important) will be ephemeral. My example may not bother you much right now, but at some point people will want this material as they do historical or political analysis, and it will not be there. At any rate, it will not be on that website, though no doubt someone somewhere will have filed it.

But as an article in the Observer newspaper pointed out last Sunday, there are other issues of a similar kind in today’s world of electronic information and document storage. An increasing number of us have our photographs only on our hard disks, with no hard copies. But something may happen to our computers, or indeed they may become obsolete, or the software that makes our images viewable may change so that in a few years we can no longer open them. Gone are the old paper diaries, in are the blogs and the jottings on social networking sites. If my great grandchildren want to read these, will they be able to? Quite probably not. And if that is so, has our new information age actually made that information very fleeting?

I actually think that these are important matters – and at any rate my own contribution to this will be that I shall spend some time this year printing out at least some documents, emails and photographs that I would hate to see lost to future generations. Maybe that’s just ego on my part, but I feel it’s the right thing to do.

Obama, America and the world: restoring a balance

In Monday’s Irish Times, two contributors debated whether George W. Bush was the worst US President ever. Of the two, the piece that caught my eye was that by  Fintan O’Toole. Put in a nutshell (and I hope I am fair in my summary), he argues that George Bush was not the worst President (albeit an insignificant one) because to describe him thus would undermine the more important point that the United States as a whole is deeply flawed, and that even its apparently best Presidents did unspeakable things. Although he doesn’t draw this out, there is an implication that the US has a particularly bad record when it comes to violence and the abuse of human rights. George Bush was merely doing what comes naturally to American leaders.

It is of course a particularly foolish thing to try to create a league table of abuse of power, but I don’t think that the argument identifying America as a leading miscreant stacks up. Some of Fintan O’Toole’s examples are in fact a little doubtful in terms of historical accuracy; but quite apart from that, no country worth examining has a good record in those terms. Abuse of military might has accompanied all empires, from ancient Rome to the Third Reich. Of course the United States has done bad things. Leaving aside the last eight years altogether, nobody could now seriously claim that its conduct in Vietnam was defensible. Nobody could, or should, ignore the serious harm done by US political manoeuvres in Latin America and parts of Asia and Africa. But at exactly the same time, other countries were doing evil things also, many of them only better than the US in the sense that they had less power with which to inflict their misdeeds on others. The United States has had no leader in its entire history one could name alongside Hitler, Stalin, Franco, Mussolini, Pol Pot, Caetano, Bokassa, Mugabe. Ireland itself may not have invaded other countries, but we know there were things happening here in the last century of which we cannot be proud.

Like Fintan O’Toole (at least I imagine), I was part of the generation of young people appalled at Vietnam and at the cynicism of the West in its conduct of the Cold War. I spent some of my teenage years on protest marches. But for all of that, the Vietnam war is not symbolic of the United States of America – much less so, in fact, than the Marshall Plan which saved Europe after the Second World War, or the willingness of Americans to look beyond selfish interests when reaching out to the world.

So maybe my hope right now is that, in the Obama era, we can restore some balance in how we view America, just as the US seems ready to restore some balance in how it sees and interacts with the world. That will be good for everyone.