Does America First herald the demise of Pax Americana?

by Jun 17, 2017

The second half of the twentieth century was the era of Pax Americana as the country dominated the world politically, militarily and economically. Yes there was the Soviet Union but its power was limited to military might and politically through coercion of its satellite states and aspirations of communist parties and third world movements. But the Soviet Union became estranged from its most powerful ally, China, western socialist parties were more inclined to social democracy, rather than the doctrinaire communist ideology. Communist insurgents in less developed countries were besieged and apart from isolated cases never came into power. When the Soviet regime folded in the late 1980’s, it left America in pole position leading commentators like Francis Fukuyama to proclaim “The end of History”, which implied that that Pax Americana and its ideals were here for ever. Trump’s mantra, America First resonated with his base on three counts. Firstly, that America had lost its position in the world and was not respected by allies and foes. He would reverse that trend. He stated that America was being taken for a ride by allies, China and other countries that had unfairly devastated American industry and jobs. He would make allies pay their way, reinvigorate the rust belt and bring back jobs. He was highly critical of Islamist terror which he vowed to exterminate.

How did Trump come up with these themes? Yes there were dark clouds in America’s hegemony but in many ways Trump’s analysis and solutions are delusionary. The US economy which at the turn of the last century under Clinton saw rapid growth was going through transformation as international trade was liberalised, notably, under World Trade Organisation (WTO) rules, NAFTA and the emergence of a major player China, which abandoned communist economics. Western corporations were blindsided by the size of the Chinese market with over one billion consumers, and encouraged and coerced into making the country the factory of the world. The WTO, the China factor, NAFTA and export led growth in other countries resulted in huge shifts in production away from America and Western Europe. US corporations were active participants, shifting production to take advantage of low wages to maximise profits. This trend which has continued in the 21st century has devastated America’s rustbelt. This was however not the full story because new technology and automation in particularly, was largely responsible for the loss of industrial jobs. Another factor is the mighty dollar, which according to a recent report is 30% over valued on a trade weighted basis. All things being equal, the huge and persistent trade deficit that America has accumulated would have caused the value of the dollar to depreciate thereby rectifying this trade imbalance. This has not happened because of the use of the dollar as the world currency; foreigners have tended park their earnings in the US and/or hold them in the currency.

The US has the largest army and significant outreach politically and militarily. It spends far more on defence as a share of its GDP than its allies. It has prodded its NATO allies to spend up to 2% of their GDP on defence. They are still in transition and most have yet to get to that goal. It should be noted though that the US defence budget is controlled by hawks in Congress who continually increase outlays and their decision is in no way guided by the NATO guideline. Furthermore, this is the price of being the only super power and the US made a decision to engage in two wars, without any consultation of its allies, one of which, Iraq, was totally unnecessary.

With regard to Islamic terrorism, we need to place the issue in some historical perspective. In Afghanistan, America encouraged and assisted rebellion against the soviets, in the 1970s and intensified this support under Reagan, sowing the seeds of Islamic insurgency as Islamic ideology pervaded rebel movements fighting the secular soviet supported regime. US support for the corrupt Shah of Iran and Israel, the failed peace process between Israel and the PLO and autocratic regimes gave rise to the Islamic revolution in Iran, Hamas in Gaza and turned large segments of the Arab world to Islamists. The removal of Saddam Hussein, a brutal but staunchly secular leader and the subsequent dissefranchinisation of his minority Sunni support base created fertile grounds for ISIS. The removal of Gaddafi from power in Libya instigated by European leaders but supported by America, with Secretary of State Clinton prodding a reluctant Obama, was another bonus for Islamists who filled the space created by the ouster of the autocratic leader. Trump needs to take into account this historical perspective before wading into the quagmire because US intervention in virtually all these developments noted above have had unforeseen consequences.

Against this background of America’s diminished economic power, China’s emergence as a power, slow economic growth and wages in the US, terror attacks by Islamists, Trump’s simplistic positions seemed like the right solutions to his base, White working class Americans. As is often the case with demagogues, Trump sold himself as the fixer, akin to his role in The Apprentice, untarnished by the corrupt Washington elite. The scorecard to date has been vastly different from his campaign posture. Indeed he has weakened America considerably at home and abroad.

At home, America has not seen a more dysfunctional administration, without any significant legislation success. He has made little headway in major legislative priorities he had championed, such as healthcare (the house bill is languishing in congress) tax reform and infrastructure because of his incompetence, flawed policies and a fractious Republicans conference in congress. He is besieged by lawsuits and strong and vocal opposition by civil organisations, states, local authorities and the media. The judiciary continues to oppose his travel ban on Muslim majority countries. The darkest cloud is the alleged collusion between his election campaign and Russia. Former FBI Director, whose devastating testimony to Congress about this allegation has described Trump’s statement on the issue as “lies, plain and simple”, characterising the President as a bully, using his office to obstruct the investigation. This cloud weakens the administration, dominates the news and makes it difficult for Trump to develop and implement his agenda and impose his authority on lawmakers, with many Republicans in congress worried that a deeply unpopular president will reduce their chances of getting re-elected.

The political situation in America is the most polarised ever. This prevents parties from working together for the mutual benefit of the country and Trump exacerbates the situation. Two glaring examples of this situation are attempts by Trump and his party to repeal the Dodd Frank rules aimed at protecting the public and economy from a repeat of the ravages of the recent great recession. Another example is the repeal and replace move on Obamacare. Republicans just appear to hate these sensible regulations primarily because they were enacted by Democrats. In the case of Obamacare there are reports that after the house gutted the regulation, the senate, sensing the political price that will follow the enactment of the house bill, is reinstating much of the original Obamacare features so that it has been called Obamacare light. What seems to have been lost in the process is for lawmakers to have paused and said how we could improve on the existing legislation.

This dysfunction is playing out on a number of issues that could actually strengthen the country but are bogged down by a highly polarised congress. Key among these and a major driver in Trump’s election relates to the high and persistent US trade deficit. Republicans have proposed a Border Adjustment Tax (BAT) that will tax imports and effectively subsidize exports which will not incur the tax. BAT will address a number of issues; it will minimize America’s voracious appetite for imports and encourage import substitution and exports thereby reducing the trade deficit and, raise tax revenues to offset the country’s large budget deficit. This proposal is unlikely to move forward partly because of partisan politics, because Republicans want to use savings for tax cuts, but ironically, because it does not have Trump’s support (it is not in his budget) even though it is in line with his America First mantra. Lawmakers and business leaders have acknowledged the need to improve America’s infrastructure, but Republicans vehemently opposed Obama’s initiatives. Now with a Republican President they have embraced the issue. The only problem pointed out by analysts is that Trump’s proposal is merely an opportunity for corporations to make money on projects, serving metropolitan areas while ignoring less attractive but badly needed infrastructure in Trump’s (low output) heartland. Investment in clean energy is an area that would be good for the country and has the support of the general public and the business community but Republicans and the Trump administration are hostile towards this area as demonstrated when Trump pulled out of the Paris climate agreement. Investment in science and technology will improve America’s competitiveness and is supported by scientists and business leaders but attracts little support from Republican budget deficit hawks and Trump has actually reduced the budget for this area. America is being prevented from achieving its greatness because of partisan interests and Trump’s lack of vision and support and despite his assertions to be a non-politician, politics is in the way and he is at the centre of it.

The administration’s foreign policy agenda and Trump’s handling of it is even more worrisome. Shortly after firing the FBI Director Trump met with Lavrov, the Russian Foreign Minister, displaying bonhomie that is absent from his interaction with America’s European allies. European allies viewed this event with alarm because of Russia’s occupation of Ukraine, veiled threats against former satellites, intervention in elections in Europe and Putin’s policies in Russia which are anathema to their democratic principles, notably, his treatment of opposition parties and the media. Trump’s recent trip to the continent was a disaster. He failed to confirm America’s commitment to NATO’s Article 5, which states that an attack on any country in the alliance would be countered by force by all members. Trump deleted that statement in his speech that his State Department and National Security Adviser had helped prepare. While he subsequently affirmed America’s commitment to Article 5, two weeks after the meeting with NATO members, the damage was done and his earlier action says more about Trump’s true views about the alliance. The main thrust of his speech was berating NATO members for not spending enough on defence. He behaved arrogantly, refused to bond with European leaders – at one stage riding a cart rather walk with other leaders. Photos show how he pushed aside the Montenegro leader to get in the front row. He would not commit to endorsing the Paris Climate Change agreement, and repudiated it as soon as he got home.

Back home, rather than showing sympathy with Londoners in the recent horrific terrorist attacks, he was highly critical of its Muslim mayor; ironically while commenting at length about the London attack he was notably silent about the terror attack that killed two men who were protecting Muslims from abuse by a White supremacist in the US about the same time. He has got embroiled in the dispute between Qatar and its neighbours and in the typical Trump fashion claimed credit for that country being demonised by other gulf Arab states. Trump as usual has not taken into account the fact that Qatar hosts the largest contingent of US forces in the region. His message of “condolence” to Iran on the recent terror attacks has been described as “repugnant” by that country’s foreign minister.

America, which had lofty ideals about democracy, seems to be retreating from that sphere as demonstrated by a recent directive from Rex Tillerson the Secretary of State, who directed his diplomatic staff to separate “the way people are treated” from foreign policy, its friendship with dictatorial regimes and hostility to world forums and agreements.

Trump’s disastrous foreign policies and actions have drawn the ire of Senator John McCain, the Republican chair of the Senate Arm forces committee who while a fierce critic of President Obama, stated in a recent interview that the former President was better than Trump “ as far as American leadership is concerned” on the global stage. His actions on NATO and the Paris Climate accord has caused the German leader to state that Europe “must take our fate into our own hands”, implying that Europe cannot count on the US anymore. Other allies are also wary and uncertain about this neophyte, naïve and unpredictable president, Besieged at home, losing the friendship and respect of allies abroad. Trump would have hoped to make up with his buddy, Putin but that relationship cannot develop because of the cloud of Russian interference in the US election and defence hawks in his own party who are wary of the Russian bear. The senate has recently unanimously passed legislation to impose further sanctions on Russia and make it impossible for Trump to lift Obama’s and the new sanctions without their authority; Trump was apparently planning to lift those sanctions.

Tump’s election and the populist mantra reflect a deficiency in the American electorate mechanism and the political climate in general. In a paper by Jonathan Rauch and Benjamin Wittes, titled, More professionalism, less populism: How voting makes us stupid, and what to do about it, the authors note that “participation is effective only when supplemented by intermediation, the work done by institutions (such as political parties) and substantive professionals (such as career politicians and experts) to organize, interpret, and buffer popular sentiment”. They contend that the Electoral College system “was intended as a firewall against the popular selection of a dangerous or unqualified president”. The authors analyse the dangers of unbridled populism that the founding fathers envisaged and how the nation should be protected from the likes of Trump. They cite polls which show that a third of the public (and half of Republicans) believe that Obama was born in Kenya and that Hilary Clinton was involved in a satanic paedophilia ring. The public make “rational decision” but need guidance from intermediaries. In this digital landscape with an abundance of fake news and alternative facts a large section of the electorate have abandoned mainstream media for what they consider as trusted sources such as social media and when they do read the mainstream media, they tend to go for highly partisan ones, in the case of Trump supporters, Fox News. Hence we have showman Trump who constantly reminds his supporters not to trust mainstream media, which he claims are the enemy, rather than purveyors of objective news and analysis. The Republican Electoral College process helped in Trump’s nomination. The Party unlike the Democrats, operates on a winner takes all basis and super delegates do not have the freedom to vote according to their evaluation of the candidate but must adhere to the votes cast in their states even though they are much more qualified to assess the qualifications of candidates; there was no “firewall”.

Pax Americana is truly on a downward slope, thanks to Donald Trump. Respect is earned and so far Trump has only advocated hard (military) power, with no time for soft power. His attitude and policies means America is not seen as a beacon of liberalism and democratic values. Europe will no doubt be seriously considering Chancellor Merkel’ statement. The economic ails that Trump gripes about are imaginary because Obama left him a much better economy than he inherited and is envied by other countries but Trump could squander it because of inappropriate policies. The view that America is being taken for a ride is a simplistic notion, there is a complex dynamic at play and Trump does not seem to understand or have an interest in policies that will keep America in the forefront of allies, the world as a whole and cutting edge issues and sectors such as clean energy technology. His approach on terrorism and forays in the Middle East ignore the historical perspective and risk America being sucked into a very complex dynamic. The American political and electoral process, in particular, the Republican Party’s approach, without a firewall, has allowed an unqualified President to take the mantle. The country is paying the price for it.

J Boima Rogers is Principal Consultant at Media and Event Management Oxford,