American Presidential Politics

From all appearances, foreign policy will not play a major role in the coming U.S. presidential campaign. The candidates have not really confronted each other over foreign policy issues, and the media have not plugged these issues into the political equation. While the candidates and electorate may not be deeply interested in the world, that does not mean the world is not interested in them.

What people think is important and what will be important are often two different things. The next president will wrestle with a fundamental question: What is America's relationship to the world? This will not be a debate between internationalism and isolationism but instead a question in search of an answer: Has the Eurasian balance of power stabilized sufficiently to allow the United States to reduce its exposure and risk taking?

In looking at this long-term question, it is important to note that contrary to foreign policy fantasies in Washington, history is shaped less by foreign policy specialists than impersonal forces. No one truly controls foreign policy on a planet of 6 billion people. Instead, policy makers are much more prisoners of these forces - geography, population, economics - than they are in control of them.

There is an apparent paradox here: If no one is really in charge, then what difference does it make who is elected to the White House? The paradox can be answered this way: As individuals, neither George W. Bush nor Al Gore is of particular consequence. In some ways, they are interchangeable.

Nevertheless, the Republican and Democratic parties are creatures from different parts of American political culture. They represent different interests that, in turn, exert different pressures on the direction of foreign policy. The differences should not be overstated - the two parties are intertwined, a sign of relative health and stability - but the divisions are there and they matter.

While no one can predict what either man would think in the White House, it is possible to look at where they are coming from and survey the terrain in which one of them will make policy against a backdrop of powerful historical forces. Whoever is elected will confront one fundamental issue cloaked in differing disguises: What is the relationship between the United States and the world?

It is the same question that America has faced throughout its history. The United States dominates North America politically, militarily and economically. North America is effectively an island. Though extraordinarily prosperous, it is not invincible. If, for instance, all of the resources of the Eastern Hemisphere were to be united and mobilized against it, the United States would be at risk. Therefore, three times during the 20th century, the United States intervened in the Eastern Hemisphere to prevent its integration into a single system.

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U.S. intervention in World War I, World War II and the Cold War were made necessary by the failure of the intrinsic Eastern Hemispheric balance of power to work. As a result, the United States exerted a huge effort and undertook enormous risks. Whatever the American public believed subjectively, the issue at stake was not ideology, but fundamental national interest: to prevent an integrated Eurasia.

With the collapse of the Soviet Union, a new dynamic has unfolded in the Eastern Hemisphere. At least for the moment, no single power threatens to create a hemispheric hegemony. China, regardless of its population, cannot. It is, more than anything else, an island. It faces the Himalayas to the southwest, Siberia to the North and the ocean to the East. Indochina is difficult to subdue. Geography stands in the way of Beijing dominating Central Asia.

The picture that is emerging - and will emerge over the coming years - is a fragmented one. Russia will spend a generation reasserting and consolidating its sphere of influence of the former Soviet Union. The European Union has not yet emerged as a politico- military entity and, given the exhausted nationalisms involved, probably won't. Japan has not yet made the wrenching political break with its post-war regime. The other minor powers can be nuisances, but not threats.

Therefore, the fundamental question facing the United States during the next presidency will be the extent and the mode of U.S. engagement in Eurasia and the Eastern Hemisphere in general. This is not a debate between internationalism and isolationism, meaningless cliches from the past. Rather, the question is this: Has the Eurasian balance of power stabilized sufficiently to permit the United States to reduce its exposure and risk taking?

This is not a question of whether or not Eurasia is stable or not. From the perspective of American interests, Eurasian stability is irrelevant. Rather, the question is whether the correlation of forces is such that no Eurasian great power can emerge as hegemon. Obviously, the United States retains important commercial interests Eurasia, but it is not clear that the present level of politico- military activity is necessary to secure those interests.

Washington's political and military interventions in Eurasia made sense during the 20th century. They would continue to make sense if another cohesive power threatened to emerge. The fundamental act by a new administration will be interpreting the dynamic of the Eastern Hemisphere. If the next occupant of the White House perceives an emerging hegemonistic threat, continued presence is imperative. If there is no threat, then the existing presence and exposure must be rationalized.

The argument for American engagement is framed by the interest in a stable, international trading system. As the only superpower, the United States must take primary responsibility for maintaining that stability. That stability is indivisible; a threat to stability anywhere is a threat to stability everywhere. As a result, the U.S. presence in Korea, the Persian Gulf and the Balkans is logical and necessary. The policy of the 1990s flowed from this core analysis.

But the current rationalization for American policy avoids important questions and political forces arising in the United States:

1. Does the United States truly have a vested interest in intensified international trade? The fringe candidates, Ralph Nader and Pat Buchanan argue no. Embedded in both political parties, but particularly the Democrats, are those who would also argue against it.
2. Does intensifying international trade require a stable international system? Unless there is a complete breakdown, which occurred during World War II, instability opens the possibility for sales of everything from food to weapons. Stabilizing the system creates competition for the United States. Perhaps stability is not the optimum outcome for the United States.
3. Does the United States have responsibility to stabilize the unstable areas? Assuming that stability is good, it is not clear that America as the sole superpower translates into the idea that the United States alone is able to create international stability.
4. Is instability indivisible? Does Serbian or Iraqi behavior really affect Eurasia as a whole, or is it an entirely localized and trivial affair?

The foreign policy of the last decade took one stand on these questions. But there is another. Even if the United States has no interest in Eurasia's stability, it can still be argued that Washington has a fundamental interest in the balance of power, which no native forces can maintain. But again, who represents a potential threat? Russia? China? At some distant point, the European Union? Japan?

Perhaps we don't know, but a constant forward presence is necessary to prevent it. This is a hard case to make. If we don't know which power will emerge, what policy should be followed? In contrast, if we identify a likely threat, there are policy options. Consider Russia. If it will not only regain its sphere of influence, but over time return to the status of the Soviet Union, for example, certain policies would follow. It would be in Washington's interest to create powerful client states around Russia. Similarly, if we assume that China is the threat, relations with Vietnam might have to be redefined.

Three competing possibilities face the United States and in one measure or another, the next administration:
1. The current policy that assumes that Eurasian stability, not a Eurasian balance of power, is in the American interest.
2. A new policy that is less interested in stability than in preventing the emergence of powers capable of threatening Eurasian stability is in the American interest.
3. A new policy that regards the native Eurasian balance of power as self-sustaining and argues that reduced exposure is the most prudent course, until events shift, is in the American interest.

These are the deep structural issues confronting U.S. foreign policy. All are examples of the way in which interests intersect with choices. The first perspective is the orthodoxy of both major parties. The second is a submerged perspective of interests with investments and exposure in the areas that might be threatened by a new superpower, those invested in Central Asian energy supplies, for instance. The last in the list is the view of those who are not beneficiaries of international trade.

In the coming weeks of the American campaign, these arguments will not be made this starkly - if at all, actually. Bush and Gore share in the current orthodoxy.

Nevertheless, as we shall see when we dissect the two parties, there are in fact important differences between them that can and over time will drive them away from the orthodoxies of the first perspective. A Republican victory, over time, will cause U.S. policies to evolve in the direction of the second perspective. A Democratic victory will subtly move U.S. foreign policy toward the third.

With the economy booming and foreign dangers distant, the American presidential campaign is unlikely to attempt to move many voters with issues of foreign policy. This reflects an elite consensus on U.S. foreign policy: The international system is driven by economics, which is increasingly global, integrated and interdependent, and this is all for the good. This has been the American elite consensus for a decade.

But there is a powerful undercurrent running both through American politics and politics abroad, one that angrily and profoundly rejects this narrow economic prism for viewing the world. The speed and power of the flow of capital in the last decade has raised economies - and destroyed them. In the United States itself, a small, noisy but potentially powerful movement is rising, rejecting the cliche that a rising tide lifts all boats. Some, the leaky ones, get sunk.

The effects of globalization are among the most important legacies of the last decade. And yet they are the ones that are either accepted as undeniable fact by proponents, in multi-national corporations and government, or swept under the rug.

This is the case in the American presidential campaign: Both major candidates running for office offer the same foreign policy. Only one man will be president, and he will have to wrestle with the effects of globalization, both at home and abroad. And yet neither will talk about it. It is unlikely that at any time this week in Los Angeles, Vice President Al Gore will stop to publicly dwell on how badly the Thai economy has been ravaged, or how dislocated U.S. workers will find their place in the information economy.

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The primary mission of Washington's foreign policy has been to prevent side issues - like political-military ones - from interfering in the expansion of the world trading system. As a result, questions over Taiwan or human rights have been essentially shut out of the dialogue with China. Exceptions can be found in the rogue nations, led by governments impervious to economic pain and subject to sanctions and military action at the hands of the international community.

The result of this strategy is a remarkably contiguous U.S. foreign policy since the end of the Cold War, whether steered by the Bush or Clinton administrations. Both did everything possible to prevent the disruption of relations with China. Both have done everything possible to use institutions - like the International Monetary Fund - to diffuse power from individual nations. Under Republican and Democratic presidents alike, Washington led coalitions to war against rogue countries like Iraq or Yugoslavia, or to control dysfunctional economies, like Indonesia's.

In the 2000 campaign, both George W. Bush and Al Gore are completely committed to the pursuit of this same foreign policy. This is the ideology not only of the American elite, but the ideology of the global elite, as well. Indeed, it is not only an elite perspective. In advanced industrial countries, this ideology has mass appeal.

But it does not have universal appeal. Throughout the world, there are groups, though marginal, that are deeply opposed to this ideology. Moreover, the application of this ideology is increasingly difficult for major international leaders. Russian President Vladimir Putin and Chinese Prime Minister Jiang Zemin are examples of leaders torn by a globalist ideology they genuinely accept - but find increasingly painful to pursue at home.

Two forces are in play against globalization. First and most immediate, are the national interests abroad. It is possible to quickly construct a patchwork map of places essentially wiped out or left behind by globalization. This includes much of Northeast Asia in 1997, all of Southeast Asia even today, the whole of South Asia, with the possible exception New Delhi, nearly the entire African continent and at one time or another huge swaths of Latin America, including Mexico and Brazil. All in all, nearly 1 billion of the earth's 2 billion people have been hit head-on by the wave of creative destruction.

Second, are the social movements within nations that represent classes harmed by globalization and objecting to it on their own ideological grounds. This opposition is far from dominant but it is there, it is real and it can be heard.

In fact, it promises to be loudly present outside the Democratic National Convention in Los Angeles this week, where tens of thousands of protestors will provide flashbacks of the World Trade Organization protests in Seattle - only to be dismissed as a meaningless movement of malcontents. Malcontents they may be. Meaningless? In this election, almost certainly. But meaningless in the long run? No.

The central thesis of globalization is this: Removing barriers to trade will increase the collective wealth of humanity.

Underpinning this are three prior assumptions:

1. Economic well-being is by far the most important consideration in social life. The ideology of globalization assumes that national impulses are primitive, tribalist hangovers and that the desire of say, Indians to have an economy not dominated by German corporations is a disease to be cured.
2. Economic growth is desirable regardless of social disruption. The United States came into existence as a social disruption and has institutionalized it. While it works in the United States it is not clear that disruption will work equally well elsewhere.
3. The distribution of economic benefits is less important than the aggregate benefits of free trade. Unsophisticated advocates ignore harm and look at total growth rates. More sophisticated advocates acknowledge harm and emphasize the need for all to benefit - but they ignore relative growth inside and between countries.

In short, globalists are simply and willfully ignoring the realities of politics.

To them, nationalism is a bothersome annoyance. And yet, the most important lesson of the 20th century is that the proletariat does have a country and that national loyalty is more important than class loyalty. Both world wars and the national uprisings against the Soviet empire are proof enough. Ironically, it was the greatest classical economist, Karl Marx, who memorialized a phrase now essentially etched on Wall Street and Pennsylvania Avenue alike: "Capital has no country."

In reality, though, Marx and enthusiasts for globalization aside, nations do matter. And within nations, the sense that leaders have betrayed the national interest in favor of an internationalist ideology also matters. This does not matter nearly as much during times of wild prosperity - as the United States is experiencing today - as it does during periods of economic pain.

But even in a period of tremendous prosperity, witness the two marginal candidates in the presidential election: Pat Buchanan and Ralph Nader, two men with diametrically opposed personal and political histories, who have arrived at very similar positions on globalism and nationalism. The rhetoric differs; Buchanan sounds a nationalist note where Nader sounds a class tune. But both strike out at the consensus on globalization represented by Bush and Gore.

These movements are certainly marginal today. That does not mean they will remain so, however. The global economy is increasingly out of synch, de-synchronized. The enthusiasm for globalization in the United States is not reflected in Asia. In the heart of Europe, in Austria, a major nationalist and definitely anti-globalist movement has achieved striking electoral success in the midst of a barrage of criticism from the rest of Europe. In Latin America, indigenous movements, students and others have sounded their suspicions.

The kind of growth rates being experienced in the United States today will not - cannot - last forever. What goes up must eventually come down. Certainly, the core prosperity will continue for several years, but given coming demographic shifts - the impending retirement of the Baby Boomers in the United States - it is reasonable to expect major secular shifts in the American economy over the coming decade.

And the withdrawal of vast amounts of money from the capital markets will create a different political dynamic in the United States - both at home and abroad. The great American geopolitical choices in the coming decade are withdrawal, collective security and balance of power. When things cool, choices will have to be made - not merely about economics, but about security and politics.

At that point, later in this decade, the advocates of globalization and those suspicious of it will clash, both abroad and in the United States. The next American president - unlike his two most immediate predecessors - will have to wrestle with this powerful conflict. For the first time the elite will find that their approach to foreign policy is not universally supported; those masses that have bought into it will begin to second guess themselves - and their leaders.

The two major parties will at that time be caught in the cross currents. Republicans who helped foster a global economy will be forced to defend it. But the Democratic Party will stand to lose the most. After all, it has hammered an unwieldy coalition out of the financial elite in New York and labor unions in Michigan. That coalition will be stressed severely, when the dynamics of globalization begin to change.

Regardless of the party in power, the president - whether the occupant of the White House in 2001 or his successor - will be forced to readdress the foreign policy that has so easily underpinned successive administrations. Coalitions will be harder to forge, multinational institutions will be even more unwieldy. Close allies will become fierce economic competitors.

Already, these currents are building like eddies in the backwaters of a great river, in places as disparate as Jakarta and Vienna. And in Los Angeles, too. Whether you agree or disagree with the demonstrators in Los Angeles is irrelevant. Listen carefully to them. They will be vying for power in the United States in the coming generation, and holding power elsewhere. The debate over foreign policy will no longer be between left and right, but between globalists and their critics.

Economics: 2000 to 2005

In economic terms, the United States has experienced a massive surge in capital formation since the 1980s. Most important, the qualitative nature of this capital is dramatically different than before. Capital increases worker productivity. But not all capital increases worker productivity at the same rate. It is more and more obvious that we have not only seen a quantitative increase in capital formation, but a qualitative shift in capital's productivity. This is why the expansion, almost a generation old when viewed in terms of productivity figures, interest rates, inflation or other traditional measures, continues to appear to be relatively young and vigorous.

Stratfor has been extremely bullish on the American economy since 1995. To our amazement, we continue to be bullish. This is particularly troubling since, as our readers know, we tend to be extremely traditional in our view. We believe in cycles, not extrapolation. Nevertheless, we see little reason to expect the expansion to end over the next five years, although a downturn on the order of 1987 or 1991 certainly cannot be ruled out as a possibility. But the main trend remains extremely positive for at least the first half of the decade.

Consider the apparently irrational boom in Internet stocks, in which equity values are completely unrelated to revenues. On the surface, this would appear to be a bubble akin to the Tokyo real estate price surge in the1980s. But look at the Internet this way: in less than a decade, an entirely new communication medium has emerged, with implications for every dimension of economic life. It is certainly going to have a social impact equal to that of the automobile or telephone. It is such a dramatically new part of the social and economic infrastructure, that its technology model has outstripped its business model.

Investors, acting on the expectation that revenue will in due course catch up, are quite rational in establishing equity values independent of revenue. Certainly there will be massive shakeouts and consolidations, which will be painful, as was the case earlier in the century in the auto or airline industries. But betting on the Internet is about as irrational as some of the valuations given to railroads in the 19th century, where revenue lagged far behind valuation. The people who bet on the railroads were far more rational than the "conservative" investors waiting for revenue to catch up. Therefore, we do not see either the market as a whole or the technology sector as representing an irrational bubble in the American economy.

Our expectation is that the massive growth spurt will continue for the first half of the decade. Though it would not surprise to see a sudden, very frightening downturn in the markets or a short, sharp recession, not dissimilar to 1987, the basic upturn will continue until at least 2005 and probably for several years thereafter.

Economics: 2005 to 2010

We do, however, see serious problems developing after 2005 and intensifying toward the end of the decade. The key problem is demographic. As we argued in our last decade forecast, one of the engines driving the American economy during the last 20 years has been the maturation of the baby boomers. A huge age cohort entered its most productive years during the 1980s. This cohort entered a period of intense capital formation during the 1990s, when boomers in their 40s and 50s shifted from net debtors to net creditors.

One of the great engines driving the stock markets is the 401(k) plan. People in their 40s and 50s are pouring huge amounts of money into their retirement plans. Most important, consumers cannot easily withdraw this money, because to do so results in severe tax penalties. Therefore, the growth in the stock market has created a vast pool of stable money that supports the markets, helps provide capital for investment, places a ceiling on interest rates and creates major growths in net worth independent of savings rates. This, coupled with either stable or rising home prices, has generated substantial private wealth for a large social stratum. It certainly does not encompass all Americans, but it does encompass a great many, creating the expectation -- among large segments of the professional and managerial classes -- that they can look forward to an extremely prosperous retirement.

That expectation poses a serious mid-decade danger. At each stage in the lives of baby boomers, they have reshaped a different aspect of American society. Toward the end of the decade, many of these boomers will be heading toward full or partial retirement. Given their net worth, they have an expectation that they will be in a position to reduce their productivity as they approach 60 years of age.

Money will stop pouring into 401(k)s and into the stock market. Withdrawals will begin. Houses will be sold. A fairly sudden, massive downward pressure on both equity and housing prices will be experienced. A massive shift in psychology will, we think, also take place. As equity and real estate prices begin to slip, boomers see their net worth at risk. There will be a tendency to liquidate vulnerable holdings and lock in value. The ingredients for an intense panic, with extended consequences will be very much present.

Presidential Politics in the Next Ten Years

A United States as powerful politically and militarily as it is now is a problem for the world, but not a particularly dangerous one. Prosperity tends to make people less concerned with politics, and less worried about the rest of the world.

It is startling to note, when we compare the 2000 elections to those in 1980, for example, how little controversy there is over issues and ideologies. Except for marginal candidates like Pat Buchanan, the differences among candidates have more to do with personality and character than with principle or issues. This is certainly the case when we compare the situation with the Reagan- Carter election. It is also startling to realize how little interest there is in the outcome of the election. In good times, politics appears uninteresting and marginal.

Pat Buchanan's presidential campaign intrigues us, not because he is going to win, but because he reminds us of Barry Goldwater in 1964. Despite the fact that few ideological similarities exist between the two, they are both precursors. Goldwater had no chance of winning in 1964, but he was a precursor for Reagan's conservatism. Just as Goldwater represented an emerging trend in 1964, we think that Buchanan represents an emerging trend in 2000.

Goldwater posed the first systematic attack on liberal orthodoxy in 1964. Buchanan is posing the first systematic attack on the twin orthodoxies of free trade and U.S. global responsibility. Buchanan's arguments will appeal only to a small segment of Americans during the boom times of 2000. However, during the economic difficulties we predict for later in the decade, anti-free trade sentiment will have a much broader audience, along with a general resentment against the world as a whole.

Fast forward to 2008 and assume that we are right in our forecasts. American military power will still be paramount, if not quite as absolute as it is today. But as economic troubles arrive, the easy consensus will unravel. Politics will once again be important and the election of 2008 will matter. The issues will also be dramatically redefined.

As was visible in the late 1980s, economic constraints generate protectionist sentiments in the United States. Part of this derives from a culture that feels the rest of the world is taking advantage of the United States. Part of it comes from rational economic reality. Asian exports are far more tolerable in boom times than in bad times. During economic downturns, there is a general tendency toward protectionism. This is particularly the case when, regardless of magnitude, the downturn generates insecurity among pivotal sectors. By 2008, we would expect large sectors of the public to resonate to protectionist and isolationist doctrines.

Forecast

Our expectation is that political discourse will slowly redefine itself in the course of the decade, with the dividing issue in American life being free trade versus protectionism. The worse the downturn of the latter part of the decade, the more powerful the protectionist forces will become.

It is vital to understand, of course, that a round of protectionist measures by the United States late in the decade will have profound effects on the international system. Most important, as the United States disengages from the Eastern Hemisphere, powerful hegemonistic forces will emerge in Eurasia that will tend to destabilize the international system as a whole. That will leave a politically resentful, militarily powerful America, suffering from serious but far from catastrophic economic dysfunction, facing an increasingly unstable world.

It is therefore our view, to be discussed in more detail in the context of Europe and Asia, that economic destabilization in the United States will contribute greatly to a massive rise in international tension late in the decade. Several great powers will arise throughout Eurasia, challenging American primacy. The competition among those powers and between them and the United States will be intense, complex and dangerous. It will lack the elegant simplicity of the Cold War, posing instead the mind-numbing complexity of the pre-World War I period.

Thus, we forecast continuation of the current economic expansion through the first half of the decade, along with the general political stability we are experiencing. However, in the second half of the decade, it appears to us that the United States will move, after a generation of expansion, into a period of relative economic distress. This distress will be both smaller and shorter than the boom that preceded it, but it will nevertheless trigger domestic political forces that will not only reshape the United States domestically, but will pose serious problems for the international system as a whole.

The American presidential campaign began last week with the Iowa caucuses and proceeds this Tuesday to the New Hampshire primaries. The nearly year-long campaign will be a series of waves: primaries, followed by lull when contenders emerge in March, a hiatus over the summer, pierced by the spectacles of party conventions and then the full force of the fall general election campaign.

No other nation on earth does it like the United States. Explaining the American political process to non-Americans is very much like explaining baseball; they understand the individual words but not the whole concept. This is dangerous. Foreign nations make their policy with the United States very much in mind. Foreign governments make moves thinking that they understand the meaning of U.S. politics - when, in fact, they understand nothing at all. The possibility for misunderstanding is enormous. This is particularly crucial when major transformations are taking place in the global system.

This year's campaign graphically presents the problem of the contemporary presidential campaign. President Bill Clinton's foreign policy has been - to say the least - difficult for many foreign governments to comprehend. It has been difficult for leaders abroad to predict when the administration would choose compromise and when, instead, it would fight. Strategic goals and tactical ones have become obscured. Direction of U.S. policy has been difficult to discern. In the coming year, the obsession that is a presidential campaign will exacerbate this trend. Though the chief architect of foreign policy, Clinton will become increasingly isolated, irrelevant and weaker as the political system searches for his successor.

But it is not as if a foreigner could detect any greater clarity by studying the Republican and Democratic campaigns now underway. Indeed, foreign policy has all but vanished as an issue. In November, for example, most candidates made a statement or two on foreign policy. Sen. John McCain denounced Russia's war in Chechnya. Texas Gov. George W. Bush declared that he would be a pragmatist in dealing with the world. Former New Jersey Sen. Bill Bradley said that the United States was spread too thin and should rely more on the United Nations. Then, they all moved to satisfy the domestic concerns of their respective activists. And that was that. None has made a major foreign policy statement since.

All this goes to a much deeper problem, the very grammar of American politics following the reforms of the late 1960s and early 1970s. Thirty years later, these reforms - meant to do good - have instead given the presidential election process a weird logic that disconnects the campaign from the logic of American society in general. Americans themselves fail to fully understand it. It is particularly dangerous when the Chinese or the Russians fail to understand what the United States is doing.

The American founders created a system with two underlying principles. The first was that political life should not constitute the centerpiece of society. The founders rebelled not only against monarchy, but also against state oppression, and so created a sphere in which the state was not supposed to intrude. Within this sphere were private pursuits - from religious passions to making money and ultimately to rock and roll. None were the government's business. The system was designed to limit power and to slow the implementation of new ideas in government. Generally, the system has done well. Except during national emergencies, the selection of the president has not impacted the private lives of most people.

The second principle rested on the creation of an organic system of presidential selection. Political parties were organized at the local level. Local machines gave rise to state machines. State machines gave rise to national conventions - which, in turn, yielded nominees. True, there was very little democracy inside the parties. Democracy began after the conventions, when the nominees squared off. But every aspect of the political system, from the way in which the parties worked to the structure of the Electoral College, gave the United States a system in which the president emerged organically from the process. He was a true creature of the system.

But during the 1960s and 1970s, the system was attacked for its excesses - and the organic connection was broken. The system was overhauled in a revolutionary fashion, creating Political Action Committees (PACs), government matching funds and the increasingly expensive and chaotic two-year presidential campaign. The country is still reeling. Many of today's similarly reflexive calls for political reform derive from the fact that everyone knows something is wrong - but everyone assumes that the problem is too little reform. Instead, it was an excess of reform that shattered the connection between president and country.

To understand the effect of reform 30 years later, consider the Iowa caucus last week. In the name of participatory democracy, the caucus was held on a workday, driving down participation. The caucus essentially abolished the secret ballot - a mainstay of democracy - by forcing people to publicly declare their choices.

New Hampshire and the waves of primaries that will follow lend further aberrations. The first is the compression of time. Most primaries are clustered from February through March. This has made campaigning more expensive and demanding. At the end of last year, the candidates still in the race had spent $79.1 million, according to Federal Election Commission records, before a single ballot had been cast. In such a short time frame, candidates must appeal directly to voters, making the process frantic and increasingly dependent on broadcast time. The presidential campaigns used to be the peak of a pyramid of highly integrated state and local politics. Now, they float above it all, in the hands of fund- raisers, lawyers, marketing and public relations people.

Disinterested in thoughtful debate, these people try to generate images of candidates and play upon issues that have "legs" among voters. Where a political boss representing a special interest might once have forced a candidate to make a concrete commitment on an important local issue, campaigns today create collages of vague promises to increase brand - without increasing commitments. Voters in primaries are usually unrepresentative of the rest of the electorate. The only solution for a candidate is to intensify the search for promises without commitments, avoid positions or use weasel words so that only lawyers can figure out what was said. The result is what is unfolding now: the issueless campaign.

Indeed, candidates who believe in anything too strongly are destroyed early by the process or made laughing stocks by the media. In early 1999, former Vice President Dan Quayle staked much of his campaign on an attack on the Clinton foreign policy. A year ago, in a speech to conservatives, Quayle said that the United States under Clinton had "lost the will and our credibility to lead." He added that no presidential candidate should be taken seriously "unless he or she understands the importance of foreign policy." Quayle was the first of two Republicans to drop out of the race, after being largely ignored by the media and unable to match the $18 million that Bush has spent.

In the "reformed" process of picking a president today, the press plays an important role. During the post-Nixon 1970s, journalism underwent a transformation, just as politics did. The Washington Post's Bob Woodward and Carl Bernstein, the two reporters who were fed the story of Watergate by whoever Deep Throat was, became the heroes of the media and reformers alike. Journalists who dreamed of being portrayed by Robert Redford and Dustin Hoffman, dreamed also of repeating Woodward and Bernstein's triumph. But Woodward and Bernstein had done something special. They had uncovered a crime.

Today, since many candidates won't oblige with a crime, lesser forms of wrongdoing will suffice. If a legal lapse is unavailable then an ethical lapse can be found. If an ethical lapse is unavailable, then perhaps a personal failing will do. This is why the media focuses on such urgent issues as whether McCain has a bad temper, Bush ever used coke or Al Gore is boring. If history repeats itself, the first time as tragedy and the second time as farce, the result has been a series of farcical elections in which the function of the media is to search, like Captain Ahab, for the whale of a scandal.

Now, consider the entire phenomenon from a foreign perspective. Foreigners try to make sense of U.S. foreign policy by making sense of American politics. After all, foreign policy is the one place where the president is actually powerful. And so this is where the strange rootlessness of the American president has its greatest - if least noticed - impact. The inability of much of the world to understand why the American president acts the way he does derives from the fact that the rest of the world - like most Americans - simply don't understand who the president is or where he truly is coming from.

Candidates can neither address fundamental issues nor speak authoritatively on behalf of the country. In the wake of last year's turmoil, China's government, for example, is most certainly looking for signals on the likely position of various candidates toward Taiwan. Depending on how Beijing perceives the candidates' positions, the Chinese may choose to act in a number of different ways. But a candidate's position on Taiwan has nothing whatsoever to do with Taiwan. It may have nothing to do with special interests in Taiwan. Instead, a position will be crafted on the fly to keep a candidate afloat in the chaos of the primaries.

The consequences can be significant. The Chinese may glom on to an errant, meaningless statement made to a reporter in the upcoming California primary, for instance, and completely miscalculate the intent. Since they have no one who speaks authoritatively on the subject in the campaign to speak to, they have no one with whom to verify perceptions. The possibility of misjudging is huge. One need only consider 1996, when the Chinese perceived that they needed to make massive campaign contributions to get any sense of what was going on in American politics.

Moscow, too, is busy re-formulating its post-Cold War policy, with one eye on the United States. But except for McCain's passing statement on Chechnya, no one has offered a true formulation of policy toward Russia. And the Russians have no party elders, no Harriman or Dillon for instance, with whom to speak and clearly understand a particular candidate's intentions.

Abroad, as at home, the increasingly peculiar way that the United States chooses a president has turned all the reforms on their heads. Instead of greater participation, there is less. Instead of stripping away the power of money, it is accentuated. And instead of lending greater clarity to America's intentions toward the rest of the world, there is only greater confusion. No one now watching the campaigns unfold knows the true direction of U.S. foreign policy, let alone what the United States might do in any given circumstance. The United States has become the black box, whose outcomes are entirely unpredictable.

In the aftermath of the Republican and Democratic national conventions, the differences on domestic policy between the two major nominees have become clear. But on one issue - at least the way in which it is presented in public - Texas Gov. George W. Bush and Vice President Al Gore continue to share one thing in common: a grim determination not to highlight issues of foreign policy.

But the election of either man would, in fact, bring a different foreign policy apparatus to power. This apparatus does not consist merely of people, although the election will bring a distinct cast of characters to the fore: new faces from the old Clinton administration in the case of Gore and old faces from the first Bush administration, in the case of the Republican nominee. But the apparatus will be more than people and organization.

It will be a way in which the next administration will view the world. A Republican administration, given the disorder in the world and the increasing tension between economics and security, is likely to evidence a foreign policy of split personality. A Bush presidency will likely try to react to the world by pursuing economic interest on the one hand and, with little coordination, pursue security interests in a way reminiscent of the Nixon years.

A Bush administration will inherit the Republican Party's inherent tension between the pursuit of power in the world and the pursuit of moral righteousness. Before World War II, the party was split. The result was the disastrous Smoot-Hawley tariff law. Later, isolationism retreated and Wendell Wilke helped create an internationalist party perspective. The 1953 election of Dwight Eisenhower sealed the fate of isolationists and made the containment of communism the doctrine of Republicans and Democrats, alike.

But there was a powerful underlying tension - one that strained the party, nearly invisibly, for decades to come. On one hand, there was a moral imperative to destroy communism. On the other, containment - which was not rollback - accepted the limits of American power and certain frontiers for communism. Being an anti-communist was a moral calling. Pursuing a policy of containment required a comparatively cold geopolitical view of the world.

This tension exploded in the 1970s with the Nixon administration's pursuit of entente with China. President Nixon recognized that the United States was exhausted by the war in Vietnam and becoming weaker in its struggle with the Soviet Union. The solution: having National Security Adviser Henry Kissinger forge what was effectively an alliance with China, turning two weaker powers into a force that could again contain Moscow. Nixon and Kissinger elevated geopolitics over anti- communism. They were pummeled in Washington for it. The strategy was a page from Winston Churchill, who forged an alliance with Stalin to defeat Hitler and once Hitler was defeated, turned on Stalin.

Everything that has followed in Republican foreign policies has been a reaction to the Nixon era. Elected in 1980, President Reagan moved away from containment and toward the ideology of destroying communism, the "evil empire."

But Reagan's struggle - like that of his successor, George Bush - was complicated by a new factor: the increasing importance of free trade. Even as the war against Soviet communism culminated in victory in 1989, Reagan and Bush laid the foundation for a surge of international trade and investment in China. The collapse of communism effectively eliminated one of the moral bases of Republican foreign policy and retained the idea that advancing the cause of free trade was not only morally right, but benefited the national security of the United States, too.

Indeed, the one-term presidency of George Bush was a case study in this: the geopolitics of Kissinger alongside the moral and economic doctrine of free trade. Bush consistently tried to merge the two, with only mixed success. His handling of Operation Desert Storm, in contrast, was a pure example of Kissinger-style geopolitics.

The Reagan administration, after all, had encouraged Iraq in its war against Iran during the 1980s. When Iraq emerged strong and moved to collect its reward in Kuwait, Bush struck back - but with only enough force to recover Kuwait, not topple the regime in Baghdad and increase Iran's power in the region. In the end, a geopolitical judgment - that an intact Iraq, even under Saddam Hussein, was better than Iranian hegemony - won the day.

Today, after an eight-year absence from the White House, a new Bush foreign policy is likely to start where the last one ended. A presidency under the Republican nominee will probably follow Henry Kissinger in its view of politico-military affairs and Milton Friedman in its view of economic affairs.

The two can work together but they are not a natural fit. Consider China again. The logic of free trade will continue to call for intensifying relations between Washington and Beijing. But the logic of geopolitics will call for containing China, with political and military restraints as necessary. American corporations want access to the world's largest market. American generals do not want to be denied access to ports or bases in Asia, as governments move to make friendly gestures toward the region's largest native power.

As a result, president George W. Bush would inherit a foreign policy apparatus that can only function in sub-critical circumstances. As tensions rise, the apparatus must make choices that the party will find difficult. Many Republican foreign policy operatives derive their world view from the Nixon-Kissinger era, but the party is controlled by interests that regard economics as a perfectly acceptable substitute for geopolitics.

A new Bush administration will grapple to control the problem. After all, Eisenhower used moralistic rhetoric to obfuscate geopolitical calculation, Nixon pursued geopolitics as a means toward a moral end and Reagan introduced free trade as a competing moral imperative to anti-communism. A Bush presidency will probably try to ignore the tensions between free trade and geopolitics so long as circumstances will allow him to do so.

But as tensions rise, he would find himself under terrific pressure from the two distinct parts of the apparatus. On one hand, the heirs of Kissinger will argue for increased military power and aggressive use of political maneuver. On the other, economic advisors and corporate backers will agree - so long as it doesn't interfere with business.

Ironically, it is easier to reconcile these tensions against the backdrop of a crisis than in the absence of one. The problem is that the Republicans today, as in their past, have too many horses in the tent and no pressing crisis to organize them. Eisenhower, Nixon, Reagan and Bush senior all had crises that gave them cover to reconcile one wing against the other. Bush, the son, will find it hard to do so, as long as the world's threat condition remains low.

In the absence of crisis, Bush - if he wins the election in November - will preside over a foreign policy of bearable tension. With a crisis, he will resemble his father and his father's intellectual guide, Kissinger.

Without the overriding enemy of the Soviet Union and the struggle of the Cold War, the Clinton administration has been able to pursue a foreign policy free of the intrigue that previous presidents have used abroad.

Instead, the Clinton years have seen the United States pursue collective security and set new thresholds for the use of military force. Vice President Al Gore, in his campaign for the presidency, is the heir to this foreign policy.

But if he wins the White House, Gore is likely to face two complications that, in turn, will alter U.S. foreign policy. First, there are signs that he will have to face great powers with interests that are divergent from those of the United States. Gore, unlike Clinton, may not have the luxury of avoiding cold, geopolitical calculations. Second, there is the long-term question: Can free trade and its consequences continue to coexist with a Democratic foreign policy of internationalism?

Over the past eight years, the Clinton administration has departed from the history of Democratic-led foreign policy. Without the Cold War, the president has been able to dispense with the Machiavellianism that could be found in previous Democratic administrations, such as Kennedy's and Roosevelt's. Instead, the Clinton years saw the United States:

1. Elevate collective security to the status of operational principle, by using the United Nations, NATO and other instruments to carry out interventions;

2. Resurrect and re-engineer the Vietnam problem. From Haiti to Kosovo, U.S. foreign policy used military power to restructure societies.

3. Reconcile anti-military sentiments with intense interventionism. Clinton managed to increase international involvement while cutting the defense budget.

In short, President Clinton has used the collapse of the Soviet Union to create an integrated foreign policy that reconciles two strains: the experiences of the Vietnam War, and those of Franklin Delano Roosevelt. What was left out was realpolitik.

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For more Global Intelligence Updates on North America, see:

http://www.stratfor.com/services/giu/region/namerica/

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There are two great layers underlying Democratic foreign policy. The first is the heritage of Roosevelt and his management of World War II. The second is the Vietnam experience. Gore inherits more than a foreign policy, but one that is historically split. On one side are those who would return to the FDR model of internationalism; on the other are those who take their bearings from the failure of force in Vietnam and recoil from power politics.

At one level, Roosevelt's legacy was his routing of isolationists. He managed the transition of the United States from a country that saw itself as insulated from the international system to a role as major guarantor of its stability. But the story is more complex.

Roosevelt was one of history's great geopoliticians. Beneath the veneer of humanitarianism, he conducted a cunning foreign policy based on extracting maximum benefits. He traded aid to Great Britain during the dark days of the war in exchange for all British naval facilities in the Western Hemisphere. Similarly, Roosevelt allowed the Soviets to bleed the Germans dry before landing in France. The United States emerged from the war occupying Western Europe, setting the stage for stripping the European powers of their empires.

At the same time Roosevelt believed deeply in the doctrine of collective security. He was the creator of and a genuine believer in the United Nations. He seems to have genuinely hoped that he could create a global entente with the Soviet Union after the war. But that effort failed. The resulting institutionalization of foreign policy:

1. An America-centric worldview with brilliant tactical maneuvering of enemies and allies alike.

2. A system of collective security in which allies bore the burden of exposure while the United States served as the final guarantor of security.

3. A dependency on institutional frameworks designed to formalize risk-sharing and decision-making.

The Vietnam experience derived from these three principles. And it contained a new doctrine: the transformation of war into social experimentation.

The doctrine of unconventional warfare, shown in the Kennedy administration's infatuation with the special forces, read the Vietnam War as an exercise in nation building. The mission of U.S. troops was to provide the South Vietnamese with security to carry out the reforms and win the hearts and minds of the people.

As this policy spiraled into failure, its architects turned against the war and the Democratic Party slipped from its moorings into power politics. The Democrats also tried to rationalize their new aversion to foreign military adventure by arguing that what Jimmy Carter called "the irrational fear of communism" had led the United States into harming American interests and the very people the country was trying to help.

But the collapse of communism 10 years ago changed this equation and set the stage for Clinton's defeat of President Bush. American power became and remains clearly preeminent. Moreover, the fear of nuclear war, a key element in Democratic post-Vietnam thinking, has diminished. What had been a great handicap to the Democrats, the reaction against Vietnam, ceased to be significant.

If Gore wins the election, he will likely be forced to reconcile two divergent strains to be found in one of the party's most central tenets today: free trade. The party is committed to free trade because of its corporate constituents. There is no equivalent ideological element.

Quite the contrary, to the extent that ideology does intrude, it cuts the other way. Clinton's reconciliation of the strands of Democratic foreign policy included elevating human rights to a central place in foreign policy; it is a key element of the social- engineering model. But free trade with China, for instance, cuts against human rights.

It goes deeper, too. The party's roots in the labor movement mean that at some level free trade is an opportunity to move jobs elsewhere. This is particularly true in the old-style industries where labor remains strongest. There is a strong anti-free trade movement in the Democratic Party, and Gore has ties to it. As president, he would also be dependent upon corporate interests with exactly the opposite interest.

As the world becomes more volatile, Gore will face a terrific challenge. On one hand, Gore will need to resurrect the part of FDR's foreign policy that Clinton jettisoned: a geopolitical strategy. In doing this, he will have to transform U.S. military involvements from social engineering to missions that build U.S. power.

On the other hand, the argument for maintaining free trade with nations that might be hostile to U.S. political and military interests will become weaker. More important, there will be key elements of the party ready to argue that deteriorating political relations should translate into trade barriers.

The end of the Cold War saved the Democrats from the wilderness by rendering the ghosts of Vietnam irrelevant. If international threats increase, as we expect, those ghosts and those issues will be resurrected. However, the real subtext will be found in the argument over trade.

Clinton finessed this by giving us low-cost interventions while being permitted by history to avoid issues of power politics. Gore will not have the same luxury.