Category Archives: A Piece of My Mind

Creating a Transformative British Foreign Policy for the New Era

CREATING A TRANSFORMATIVE BRITISH FOREIGN POLICY FOR THE NEW ERA

“There must be a beginning of any great matter, but the continuing unto the end, until it be thoroughly finished, yields true glory.”

–Francis Drake, aboard the Golden Hind, to Sir Francis Walsingham, off Cape Sagres, Portugal, 1587

Following in Drake’s footsteps; The Benefits of Thinking Big

At present, the formulation and assessment of British foreign policy is largely left to a small number doers and thinkers; foreign policy does not form part of the national political conversation, even at the elite level. A small number of people are thinking small thoughts. This has been true for decades. But after the earthquake of the Brexit referendum, times have definitively changed and creative strategic thinking is desperately called for.

This inability to talk about a credible strategic vision for Britain in the 21st Century is a serious problem. The basic danger of the intellectual and political community thinking small – only arguing about British foreign policy at the edges – is that it dooms the country to managing gentle “Macmillanite” decline. Instead, Britain ought to be taking advantage of the truly exciting global options available, much as the Elizabethans did, as a transformative foreign policy could safeguard its place in the world for the next generation, securing Britain’s position as a great power, capable of both leaving its mark on the world, and of protecting its fundamental interests.

Without grasping the nettle and creating a joined up foreign policy regarding the changing structure of a world of many powers, then tailoring a foreign policy strategy that works in such a time and place, and finally crafting tactics that naturally follow on from such a strategy, British foreign policy is doomed to be reactive at best, nonexistent at worst.

In other words, it is time UK policymakers rediscover the shrewd swashbuckling quality of Sir Francis Drake, whose bold comment opens our argument. For it must be remembered Drake wrote this paean to thinking big before he became the first captain to sail with his crew around the world (Magellan died along the way).

He was a visionary first, fitting out his ship The Golden Hind to endure the privations ahead, and only then thought of the tactical navigation necessary to realize his dreams of glory. If the UK is to thrive in this new, dangerous, fascinating, and far more rewarding era of globalisation, such an unorthodox manner of proceeding is absolutely necessary.

For there is an alternative to the foreign policy establishment’s present gentle acquiescence in decline and failure. It lies in remembering the intellectual boldness of Drake and the other Elizabethans in changing the terms of the strategic game they were playing, in order to seize new advantages regarding heretofore entirely unthought-of opportunities. Rather than continuing to participate in a losing three-way strategic dance with France and Spain, Drake and his contemporaries creatively thought globally instead, and by changing the very nature of the chess board set the stage for centuries of British dominance. Oddly enough, in doing so the Elizabethans’ insatiable global drive to open up inviting markets and facilitating trade beyond everything else is precisely the remedy again called for.

A truly global foreign policy

Broadly speaking, we will articulate a foreign policy that expands upon old friendships, and takes advantage of new opportunities, all the while cementing ties with the centres of the globe – specifically in North America and Asia – that are likely to lead the world in economic growth for the next generation.

Britain specifically, and the western democracies in general, find themselves in a similar structural position to that of Victorian England in about 1890. Lord Salisbury found himself in a world where Britain remained central, first amongst equals, but with others rising and rapidly gaining global market share. It is well past time for today’s Britain to steal a page from this old, successful playbook.

For as was true for late nineteenth century Britain, while presently America and the West remain Chairman of the Global Board, there are plenty of new, powerful players at the table. These emerging powers are slowly but steadily gaining relative power year on year. As such, we live in a world entirely misunderstood by great power theoreticians. It is not purely multipolar in that America and the West are first amongst equals in the new era, while at the same time the other powers are steadily gaining global power market share.

Both these seemingly contradictory facts must be fully taken on board as a starting point if Britain is to genuinely comprehend the global structure of the strange new world we find ourselves in. Only after recognising the basic nature of the new era can a truly effective strategy be created.

We believe that Britain should have three clear priorities. These are: (a) a major, self-conscious shift towards building relationships and alliances with the emerging democratic regional powers around the world (especially in Asia); (b) cementing the longstanding, and hugely successful relationship with the United States; and (c) a clear-headed policy that stands up to the small number of countries (and movements) that seek to unmake the status the quo and actively challenge the peaceful, prosperous global order that we wish to create.

Refocusing on the emerging powers

There is a strategy already out there—forgotten and neglected as it may be—which places current British foreign policy in its proper historical context. If Drake provides the path to creative, bold, counterintuitive, globalised thinking, dwelling on nineteenth century Prime Minister Lord Salisbury gives us the outlines of a British foreign policy doctrine for our new era.
Late Victorian Britain managed to draw in the emerging powers of the day – principally the United States and Japan – into the British-created world order. Crucially, it was a mix of ever-closer economic ties with the pair (coupled with sorting out long-festering regional disputes) that over a generation turned these possible peer competitors into allies. This feat of statesmanship was rewarded in 1918, when both Tokyo and Washington came to the aid of a hard-pressed London, allowing for victory in World War I.

A similar challenge awaits the new British government in 2016. Rising regional democratic powers South Africa, Israel, Japan, Indonesia, Australia, Canada, Brazil, Mexico and especially India are the obvious new opportunities out there to be courted. With Delhi back on track to grow at more than 7 percent this year, faster than China, this obvious and necessary strategic gambit must be greatly accelerated and made a pillar of the new British foreign policy.

Closer ties with booming India, a country blessed with highly favourable demographics, old and enduring links with the UK, and the ability to serve as a counter-weight to China, ought to be a strategic no-brainer.  In fact, the single greatest geopolitical challenge of the next generation is whether the rising emerging regional powers can be successfully integrated into today’s transatlantic-inspired global system, based on both the attractiveness of its values and its enduring ability to provide security and prosperity for those who support it.

If the rising regional powers become status quo powers, guarantors of the broadly benign world order established by the West, all will be well. However, a failure to do so will see them rise as revolutionary powers, determined to unmake the present global system; we will then live in the jungle, without any system of global order at all. By focusing its foreign policy on the free-market, democratic regional powers throughout the world, the UK can provide a way forward in dealing with this absolutely central geopolitical challenge.

Fortunately, there are a number of important instruments to hand to help weld this new alliance together. First, and we should be far less shy about this; all the countries listed above are democratic, meaning that philosophically they broadly share a common way of looking at the world. While democratic peace theory can be overstated, it remains the empirical case that in all of recorded history, established democracies have never gone to war with one another. This shared belief in the dignity of the individual, of limited government, and of the intrinsic value of a representative political system and a free press, should be shouted from the rooftops, both on its own merits and because it becomes part of the glue that can bind this new world together.

Beyond these essential shared values, the practicalities of a prosperity based on free trade and capitalism are the essential tool that must be used to link the major regional powers of this new world to one another. As the great American thinker Ralph Waldo Emerson put it, ‘Every man is a conservative after dinner’. A prosperous world – wherein the major powers all have skin in the game for keeping the present system afloat – is a safer world, a better one, and an enduring one.

For presently, even more than is true of democratic values, it is the capitalist system that has conquered the world, and must be made a rallying cry for enticing the new regional powers to become defenders of the global status quo. Emerging Market elites are also now judged by their populations according to their ability to make market economics work, and these elites have a tremendous personal and collective stake in maintaining the working international capitalist system, as is of course true for western leaders.

This powerful tool – enticing the emerging powers to defend a system that has brought them dramatically increased prosperity – must be built upon, with free trade agreements becoming a far more central element in driving UK foreign policy. These increasing links will literally bind the new world together, making every major new ally a conservative after dinner.

Historically Britain has been the leading free trading power, a mantle it must pick up anew. Geography largely explains this. The sea has simultaneously provided Britain with what Shakespeare called a ‘moat defensive’ against the continent, while also serving as a ready-made highway to the rest of the world in Drakean fashion. Pursuing free trade deals with countries that already broadly accept the vital necessity of the project will have fundamental geopolitical benefits, further linking the old western world to the new.

So by looking back to the days of Lord Salisbury, British foreign policy can look ahead to the new multipolar world, developing a first strategic pillar based on the absolute imperative to construct a new global alliance of regional powers that are wedded together by the values of democracy (in most cases) and the practicalities of the free market (in all cases). Britain ought to make it a priority of its new foreign policy fit for purpose to take the lead in such a heroic endeavor, as the benefits are legion.

For the only way to make any multipolar system actually work is to focus intently on the regional powers, in this case the countries actually gaining in relative power by the day. The must be made defenders of the already-in-place western-constructed order. The good news is half the job is already done: South Africa, Australia, Canada, Israel, Japan, Indonesia, Brazil, Mexico and India are already all democratic states and are convinced believers in the global capitalist system.

In return, Britain will have – as Salisbury did so long ago – a global system of allies to turn to should times get rough, as well as dependable trading partners for the City of London and beyond, and closer ties with countries in the world which are actually growing. This shift will do nothing less than help guarantee prosperity and security for the next generation of British citizens.

Cementing Britain’s links with the United States

The second major piece of the strategic puzzle will be reinvigorating London’s ties with a surprisingly resurgent United States. Here Britain’s new foreign policy again weds its interests with its values. By re-focusing on links with the most powerful country in the world (with which it already enjoys the closest of ties based on shared values and interests), the new British foreign policy is exclusively geared toward the pole of power which will more than any other drive the new multipolar era; as such in terms of power politics the new strategy is fit for purpose in our new world.

As the shale revolution has proved once again, the American economy has a genius for reinventing itself. Having weathered the post-Lehman Brothers storm far better than any other western democracy (with the possible exception of Britain), the US – economically, militarily, and culturally – looks set to remain first amongst equals in the new era for the foreseeable future. Unlike the Foreign Office’s mantra regarding Europe, it is here that Britain – given its long-standing historical tradition of working so closely with the Americans – has genuine, lasting influence.

America remains the largest foreign direct investor in the UK (and vice versa), and Britain’s closest military and intelligence ally by a long way; rather than deriding these close ties as is all too fashionable, they ought to be seen as a fundamental source of maximising British power. Thinking through new measures at all levels – economic, military, and cultural – that renew this fundamental alliance must be the other major positive plank of British foreign policy.

Economically, given that investment is the name of the game in a globalised world, the US and the UK absolutely must strike a comprehensive free trade and investment deal, one way or the other. This could be accomplished bilaterally, through British membership in NAFTA, or through a more ambitious global ordering such as the proposed Global Free Trade Alliance (GFTA), a world-wide grouping of genuinely free trading states determined to push the envelope in terms of opening their markets to one another. By whichever route, London’s mantra in terms of increasing economic and trading ties with Washington must be free trade by any means.

Beyond cementing their already profound joint economic ties, Britain must be very careful to maintain its hard-won and justified reputation as a great military power, able to add value strategically throughout the world. Numerous rounds of budget cuts have left the UK precariously perched on the edge of losing its vital full-spectrum military capabilities; along with the US and France, Britain is the only NATO ally capable of supporting every sort of deployable mission, from full-out war-fighting to peace-keeping. This is a vital source of British power, especially in a shifting age of numerous localized and regional threats, where events in disparate, far-flung places like Ukraine, Somalia, Yemen and Iraq have reminded even the most dreamy that force – as it has since the dawn of man – continues to play a significant role in international relations.

As such, UK defence cuts must be halted and full-spectrum fighting capabilities preserved, to maintain Britain’s position as a complete great power – possessing political, economic, and military might. Such an initiative makes it clear to the UK’s primary American ally that London will continue to add immeasurable strategic value.

By adopting our foreign policy fit for purpose in the new multipolar era, Britain can help drive its close ally – the last remaining superpower – toward throwing its might behind the heroic and necessary project of securing a western alliance with the rising regional democratic powers of the world. In doing so, Britain will find itself in the familiar role of defending the global status quo that it has helped create, by reforming it. Britain must remind America that the only way to preserve the post-1945 order of the Bretton Woods institutions and NATO is to build on them, adapting them for this more globalised, Drakean world. There is no reason whatever London cannot make the intellectual running here, persuading its long-time powerful ally that here indeed is a joint project worthy of the most important bilateral alliance in the world.

Published in The Conservative, September 2016

The Paradox of Trump: Why Europeans Ought to Prefer Him to Hillary Clinton

The Paradox of Trump: Why Europeans Ought to Prefer Him to Hillary Clinton

By Dr. John C. Hulsman

Introduction: Why Trump is Bad for America

Particularly in this populist age, all seemingly incredible statements (such as my above title) must absolutely be backed up by the most rigorous of facts. So let me begin with three.

I will never vote for Donald Trump. In line with the the classic modern American demagogic tradition—from Huey Long to Douglas MacArthur, from Joseph McCarthy to George Wallace—the present Republican nominee often plays fast and lose with the truth. He either, as my grandmother would put it, outright lies, as when he said large crowds of Muslims were cheering in New Jersey when 9/11 happened, or he misrepresents, as if the President of Mexico could ever be prevailed upon to build a gigantic wall to keep his countrymen out of the United States.

These are not benign mistakes, as the world is already too full of laughable conspiracy theories passing as the truth (I know of otherwise sane Germans who have said to my face President Bush perpetrated 9/11). Despite what is fashionable in European cafés, post-modernism is just a souped-up form of nihilism, for there are objective truths in politics and life (China and India are rising, Europe is in decline) and they must be sought by all of us who descendants of Pericles and Aristotle.

Looking for truths in politics to make the world better is our job; more importantly it is our calling. Demagogues who purposely obscure the truth should be the enemies of all free thinking people, whatever their politics. For this reason alone, I could never vote for Donald Trump.

Secondly, it is highly unlikely that Donald Trump will win the election. Angry white men just don’t amount to a majority in American politics anymore, if they ever did. Trump has managed to alienate women (the largest voting bloc in the US), Blacks (the most loyal Democratic voting bloc) and Hispanics (the fastest growing voting bloc in the country). Ethics aside, it is possible to alienate two of these groups and win, but three seems to be a mathematical impossibility. Trump has the highest overall unfavourable ratings of anyone running for president in modern American political history.

May 2016 Gallup polling found a whopping 87% of all Hispanic voters have a negative view of the Republican nominee, while a substantial 70% of women shared that position. The end of June 2016 found Secretary Clinton a full five points ahead of Trump in the Real Clear Politics average of national polls, and ahead (though by strikingly less than her national average) in all the major battleground states, such as Florida, Ohio, and Pennsylvania.

 

Despite alienating vast swathes of the American electorate, Trump does a have a path to victory in the electoral college, albeit an unlikely one. If he turns out disaffected, high school educated white males in vast numbers (as he well might do), this section of the electorate–so discouraged by globalisation that many have not bothered to vote for many years—could propel him to narrow wins in the American rust belt and Midwest: Pennsylvania, Ohio, Michigan, Wisconsin, and Iowa.
If this happens (and Trump is within three or so points of Clinton in each of these states) the impossible would become possible, and Trump could just win. But in terms of odds this is highly unlikely; by at least a factor of two out of three, Mrs. Clinton is likely to win comfortably, if not overwhelmingly.

The third objective fact to put on the table is that Donald Trump is bad for America because he, like most demagogues, doesn’t care about the Constitution of the United States, which in the final analysis is all that binds my very heterogeneous country together. As Tom Hanks’s character makes plain in the first rate thriller, Bridge of Spies, the Constitution amounts to being the rule book, the glue that cements Americans to each other.

The French have had five Republics; America just one. That is a vital historical fact as this remarkable continuity, an unheard of historical record of political stability, is based almost entirely on the majority of every generation in the end adhering to the Constitution. Threatening it in any way, as Trump so obviously does in his disregard of due process and the rule of law, makes the man my personal enemy. Trump is challenging the Constitution, the civic religion of the United States, the crucial thing that makes it exceptional. For this reason alone, he must be stopped.

A simple thought experiment

So there is no doubt Donald Trump ignores objective facts (or makes them up), has little chance of winning the upcoming election, and is a danger to the Constitution and the country. I can never vote for him. Saying that, I stick by my provocative title. If I were a European, and had Europe’s primary foreign policy interests at heart, Trump is a far better bet than the seemingly euro-friendly Hillary Clinton.

I will go even further. Once Europe breathes its collective sigh of relief after Trump is defeated (which I will share), newly elected President Clinton will go on to preside over a seismic crisis in the transatlantic relationship, based on the huge and entirely overlooked disconnect between where the continent is heading, and where a Clinton White House would like it to go.

Take away the sturm und drang of the present election, and let’s conduct a simple thought experiment, looked at from the perspective of basic European foreign policy interests. Generic American presidential candidate A has openly denounced the neo-conservative movement, the most poisonous in recent American foreign policy history. After two decades of the neocons dominating the Republican Party, A has just about side-lined them, not wishing America to serve as the global policeman anymore.

A is also against most global free trade deals on offer, being a long-time and vociferous critic of both the US-Asia deal (TPP) and the US-European deal (TTIP). A has said plainly that Iraq was a foreign policy disaster and that George W. Bush lied about the pretext for the war. A vows to get tough with the Saudis, and wants to play a strikingly neutral role in any Palestinian-Israeli peace talks. A believes he can improve relations with Putin’s Russia, making that a major foreign policy priority. A sees Nato as largely obsolete, feeling it should now—particularly if a rapprochement with the Kremlin is possible—focus on migration issues and counter-terror, turning its gaze southwards rather than eastwards.

In their big foreign policy speech in April 2016, A pledges the America should only fight wars as a last resort, and that they will hold summits with great powers China and Russia as soon as they are elected to calm global tensions. As A put it, “Unlike other candidates for the presidency, war and aggression will not be my first instinct. A superpower understands that caution and restraint are really true signs of strength.”

After reviewing this sampling of A’s views, if you close your eyes you have just described in detail a generic member of Europe’s foreign policy elite.

In contrast, candidate B supported the Iraq war, and spearheaded the disastrous Libyan intervention. B only belatedly is against the major global free trade deals, cynically turning on the US-Asia TPP package that B helped negotiate in the first place.

An interventionist to their core, B has called for closer American ties with Israel, greater western involvement in the Syrian quagmire (through construction of a no-fly zone), and greater western upping the ante in Ukraine, through both a programme of far more substantially arming the Ukrainians, as well as vowing to be tougher towards Vladimir Putin. Turning their back on President Obama’s closet realism, in all these present day cases B urges Europe to also do more and follow America in terms of implementing this classically Wilsonian, interventionist foreign policy.

As Dylan would put it, ‘you don’t need a weatherman to know which way the wind blows’. A’s polices suit Europe ever so much better than do B’s. Of course, A is the hated Donald Trump and B is the well-respected Hillary Clinton (in Europe at least, in America she is the second least popular major American presidential candidate since modern polling began, with only Trump himself polling lower). This startling outcome gives anyone with eyes to see an idea of how far conventional European thinking over international relations has drifted away from the American foreign policy establishment over the past 20 years.

Secretary Clinton’s policies would fit comfortably into the brief period of unipolar American dominance in the 1990s, when her husband was president. However, in today’s multipolar world, these unipolar policy prescriptions will lead only to grief. The European elite is right to fear Trump. But in doing so, it is not seeing that the true foreign policy danger, and the coming transatlantic crisis, stems not from him but from Secretary Clinton’s coming futile efforts to jump-start American primacy (and American activism and interventionism) in an era where it is objectively on the wane.

The worrying fine print

Of course there are major aspects of Trump’s putative foreign policy that worry Europeans. Trump promises to get tough with China (promising to slap a huge 45% tariff on Chinese goods whatever the WTO says), which could unwittingly lead to trade war between the world’s two largest economies, at just the moment an economically becalmed Europe least needs it. Trump has vaguely mentioned he is no fan of the Iran deal; any effort to undo it, will be met by a clear European refusal to re-apply sanctions, and would precipitate both a transatlantic crisis, and increase tensions in a Middle East already on fire.

In terms of Europeans themselves, Trump is angry (as are both President Obama and myself for that matter) that in Nato far too many countries are free riders, taking advantage of the United States. He correctly points out that just four of the 28 Nato members meet their paltry two percent of GDP target for defence spending, all of which they have solemnly agreed to many times. Trump says he will cajole them into spending more. Having laboured in that vineyard for 15 years, I wish him luck.

The Republican nominee, to the horror of most Europeans, opposes most international accords and multilateral institutions that in any way might limit America’s freedom of action; if Trump isn’t going to let the American Constitution constrain him, he certainly isn’t going to let nebulous concepts like international law and the international community get in his way. This goes against everything that the modern European foreign policy elite (now that the British have left it) believe in.

But for all these many and real differences, Trump’s foreign policy is one that the European foreign policy elite can live with, for the basic fact that he asks almost nothing of them.

Donald Trump is offering America a protectionist, anti-immigration, anti-free trade, anti-interventionist, unilateralist foreign policy, usually the preserve of the minority Jacksonian nationalist wing of the Republican Party. What he is offering a Europe—beset by the existential euro, Brexit, and refugee crises—is a nap, a holiday from history or any broader concerns, during which it can attempt to deal with its crippling internal problems. For this structural reason alone, Trump amounts to paradoxically good news for a Europe desperately in need of some.

Conclusion: The transatlantic crisis to come

Let us conclude by conjuring up one final thought experiment, one likely to occur in early 2017. A newly elected Hillary Clinton meets German Chancellor Angela Merkel for the first time in her capacity as president. She speaks candidly to the Chancellor in a conversation that goes something like this.

“Angela, now that I have seen off the danger of American populism, a scourge which I know repulses you as well, know that in America you have a partner who shares your values. We are both Wilsonians, believing in international law, the international community, and the need to work through multilateral institutions whenever we can. We both value human rights, and solving transnational issues through the use of transnational political tools. And because our common view of the world and our common values have politically triumphed, having seen off the pernicious forces of populism, it is time for us to act together forcefully, and in concert, to do far more.”

“As such, I look forward to you and the rest of Europe meeting the Nato spending targets immediately, helping us arm the Ukrainians and standing up to President Putin, working with us in constructing a no-fly zone in Syria and doing far more there, and sending troops back to Libya to finish the job and properly nation-build the place.”

My guess is this the point where Mrs. Merkel giggles nervously, looks at her shoes….and nothing happens.

And then the crisis will be on. For it is one thing to blame transatlantic disagreements on the loathsome Donald Trump. However, in Hillary Clinton, Europeans would seem to have their dream president: competent, a known quantity, someone who knows and respects Europe. But in reality Hillary Clinton and her old-time garden variety Wilsonian views are the dagger pointed at the heart of what is left of the transatlantic alliance.

For in policy terms, the above thought experiment decisively illustrates that Europe will do almost nothing in terms of falling in line with Clinton’s practical foreign policy wishes. And if two like-minded, values-sharing leaders like Clinton and Merkel can achieve nothing in terms of crafting common policies, then isn’t the transatlantic relationship dead and buried, though clueless elites on both sides of the Atlantic might be just waking up to that fact?

A Trump presidency would put off this day of reckoning in that his less interventionist foreign policy would ask so much less of the Europeans that these practical structural transatlantic differences could be masked for a time, giving Europe a last chance to get its act together. But that is unlikely to happen.

Instead, the most likely political outcome—Clinton’s comfortable election—will almost certainly lead to a transatlantic foreign policy crisis in 2017, when it at last becomes plain to all that the Emperor simply isn’t wearing any clothes, and that in foreign policy terms Europe and America have drifted decisively apart.

The paradox of the present election is that Donald Trump is undoubtedly the worst thing for America. But Hillary Clinton is undoubtedly the worst thing for the future of transatlantic relations.

Published in Limes (Italian monthly) September 2016

Looking under the rock: Why America’s economy is the next looming global crisis

Looking under the rock: Why America’s economy is the next looming global crisis

By Dr. John C. Hulsman

Introduction: The reasons for analytical failure

I have always been a dangerous man in the world of foreign policy analysis, for the simple reason that I believe wholeheartedly in the ‘plumber’s code.’ Simply put, I don’t think my colleagues at the Council on Foreign Relations–bejewelled though their credentials often are—should be hired or even taken seriously if they are as wrong as they so often seem to be. Instead, I employ the plumber’s code. If my plumber does a good job, I re-hire next time there is trouble with the pipes. If he does a bad job, I do not. By this simple but exacting standard many of my colleagues would be hard pressed to find work of any kind.

Beyond mine, how many consulting firms called Brexit correctly? Not many, as my colleagues were too busy listening to each other and their friends in Brussels, all of whom shared the same incorrect opinion. How many saw the inherent fragility of the seemingly powerful Turkish state? Again, not a lot as it is easier to merely go with largely worthless government talking points, than to investigate a complicated country for themselves.

For that matter, how many at the time of Iraq assessed that the post-war chaos would create a vacuum leading to a serious rise in radicalism, characterised by the hideous ascent of ISIS? Far easier on the nerves to merely parrot the nonsense the White House was then peddling. No, my profession has not covered itself in glory recently, and the plumbers code would consign well more than half of the pundits I know to the unemployment line.

Particularly analytically egregious has been our propensity to be constantly shocked when obvious problems, long metastasising, burst into public view. Like fruit flies, foreign policy analysts tend to only see the stimuli in front of them—whatever the crisis of the week is—rather than looking at longer-term, and often far more dangerous, risks just over the horizon.

At present, for all the talk of ISIS and terrorism, Brexit, and the Turkish coup, the single greatest threat to global stability in many ways is the wholly neglected subject of the weakness of the American economy, and all the vicissitudes this will lead to. It doesn’t make headlines but the simple fact remains if the economy of the greatest force for global stability in world is in serious, if hidden, trouble, the rest of the planet had better start worrying now, rather than being surprised later.

The scary facts

But, you protest, the American economy is in relatively good shape, certainly compared with the basket case that is European growth numbers, Japan’s failure to make Abenomics work, the collapse of much of the Emerging Market world, and China’s herculean efforts to manage a soft landing as it moves up the supply chain. Instead of parroting the very received wisdom which has proven so wrong so often lately, let’s look under the rock and the real numbers.

Overall, post-Lehman crisis US economic growth has been merely adequate, with GDP increasing by 2.4% of GDP in both 2014 and 2015. Since 2009, growth has never exceeded 2.5%, whereas the pre-crisis trend rate was more like 2.5%-3.5%. It appears the Great Recession has permanently knocked some of the stuffing out of the potential American growth rate, the rate at which the economy can grow without triggering inflation.

If this is correct, the endless, boundless concept of the American Dream itself is a thing of the past, as mediocre growth—rather than obtaining a better life than one’s parents had—is all that awaits today’s Americans. Such a diminution in potential living standards will have obvious and highly negative political and social consequences.

If potential growth isn’t what it once was, even the seemingly sunny unemployment figures in the US are cause for hidden gloom, for it all depends on what is being measured. The current headline unemployment rate is a measly 4.9%, a number that is the envy of America’s competitors.

But hold on a minute. US underemployment is a massive problem, largely masking long-term American economic peril. According to the US Bureau of Labor Statistics, were more stringent European metrics used to measure the jobless rate, American unemployment would be a far more worrying 10.1%, or roughly similar to those sclerotic European economies. Such a ‘real’ number makes it eminently clear that many Americans have been left behind, even by the feeble recovery from the Lehman crisis.

A flurry of economic statistics bolsters this doleful conclusion. Housing prices–long the traditional store of much of American wealth—have been underwater for the Working and Middle classes since 2009, meaning homeowners owe more in mortgage payments than their houses are presently worth. The piggy-bank is empty. Perhaps most arrestingly, since 1980, the wages of fully 90% of the American working population have stagnated or declined. On its own, this one number completely explains the rise of Bernie Sanders and the populist left and Donald Trump and the populist right.

And if most Americans have been left behind by the bursts of overall prosperity for almost two generations, they are woefully unprepared for the twilight of their years. The National Institute on Retirement Security calculates that as many as 45% of US households made up of adults of working age don’t have any retirement savings at all. Further, it notes that a whopping 92% of households are financially unprepared retirement and that nation-wide there is an insurmountable savings gap of between $6.8 trillion and $14 trillion between what individuals have saved and what they will actually need in order to retire.

A major part of the problem is that, while Americans are living ever longer (a good thing), the present average age of retirement in America is 64, lower than it was in the 1960s. As is true for the rest of the west, Americans have utterly unrealistic economic expectations of what is owed to them, compared with how long they must work for it. Such unmet–even if economically illiterate—expectations, fuel rage, and the feeling that the American economic system as a whole has let the American Middle and Working Classes down. Political instability is the logical next step in this decline, a process we can now see every day.

So by analytically looking under the rock–rather than putting America out of our minds as a rare success story in these troubled times—we see a Middle Class denied the American dream of endless relative advancement, a country largely left behind by growth over the past two generations, and a people woefully unprepared for retirement, placing great strain on the country’s creaking safety net. More than even all this, the psychological malaise this is causing is eating steadily away at the American political system, as an out-of-touch elite has little understanding of these facts of life which for most Americans characterise their daily existence.

It’s the politics, stupid

It has not helped that both major American political parties have been cynically peddling wholly unrealistic bedtime stories to the people, who then are predictably enraged when these painless fairy tales fail to come to pass. Former Speaker of the House Nancy Pelosi is famous for literally being enraged if spending cuts are mentioned in her presence. This abhorrence of simple math does not bode well for the future of the most dynamic economy in the world.

On the other hand, the Republicans never met a tax cut they didn’t like, but are far more reticent to ever talk about the corresponding spending cuts that would render such a policy revenue neutral. As a consequence, in practice both parties have for a generation wholly abdicated their responsibility to their countrymen, with the Democrats spending money the country doesn’t have like drunken sailors, while the Republicans peddle the daft notion that tax cuts invariably pay for themselves, all evidence to the contrary.

Perhaps the low point in this tale of gross irresponsibility is the demise of the Bowles-Simpson report, the result of a bipartisan commission President Obama tasked with finally coming to grips with the intractable budget deficit. Headed by a former Democratic Chief of Staff and a respected Republican Senator, the report called for a sensible mix of moderate tax hikes and quite stiff spending cuts, a grown-up economic policy that would finally have brought the public debt to manageable levels. Rather than bravely adopting the proposals, the President meekly thanked the Commission for its work, and put the report in a drawer from which it has never been seen again.

This is the ultimate sign of politically how far gone America is, that any policy that prescribes pain now for gain later—any effort for the country to eat its vegetables—is seen as utterly unfeasible. Instead, it is far easier, and politically less risky, to peddle fairy tales that have absolutely no economic chance of real world success. Welcome to the age of populism.

Conclusion: There is not much time left to right the ship

On the surface, it is quite likely that the ever-wrong chattering classes will relax in January 2017, as uber-establishment figure Hillary Clinton is safely sworn in as President of the United States. Such a view, if Middle Class concerns are not immediately dealt with, could not be more wrong.

Think of it this way. An aging, deeply uncharismatic Senator from a very small (and wholly demographically unrepresentative) state with almost no legislative accomplishments to his credit just ran one of the world’s most formidable campaign machines to a near draw. The only issue anyone can remember Senator Sanders discussing is inequality, which skilfully gets at the heart of the economic malaise we have assessed, and the deep Middle Class anxiety flowing from it.

If anything the Republican Party, post election, will find itself in even worse shape, with its self-satisfied elite lying in ruins. The establishment shibboleths that have gone unquestioned for at least a generation: the obvious benefits of free trade, support for immigration, the primacy of social issues, all lie in tatters, gleefully deconstructed by the right-wing populist nativism of Donald Trump. An elite who ceased bothering to explain itself to its base has woken up to find itself superseded by its followers, who after a generation of falling economically behind are more than ready to tear the old establishment and its ideas down, to try something new.

Therein lies the danger for both parties. For while Sanders and Trump have been very good at spotlighting a gormless elite that has lost touch with America’s hard-pressed Middle and Working Classes, what they are offering to rectify the problem is pure snake oil. Globalisation cannot be ordered out like the tide, in reality it will persist whatever populists might prefer to be the case. Indeed, it is hard to think of more self-harming policies than starting a trade war with China as Trump seems to advocate or doing away with the Trans-Pacific Partnership as Secretary Clinton has cynically been forced to propose, in order to see off the Sanders’ challenge.

If the weak-kneed establishment caves into the rising populist challenge, advocating some its dafter economic polices which stand no chance of success—then the real danger will arise. As is the case for Europe, another few years of ignoring the vast economic pain that many in the west have endured for years is bound to lead to ever more virulent forms of populism. This is a call to arms; it is time to right the ship, for an FDR to emerge who gains support and popularity by telling Americans things have indeed come to a difficult pass, but that they have a real grown-up plan for helping the floundering Middle Class. It is time for a new age of the grown-ups.

Published in Aspenia, September 2016