Business

A while back I commented on the two imbalances of power that drive American grand strategy. The first is the gap between the United States and the other major powers, which makes Americans think they are responsible for managing much of the world and convinces them that they can do so with near-impunity. The second imbalance is the strength and political clout of a host of different institutions and interest groups whose common agenda is encouraging greater international activism on the part of the United States. In recent decades, the forces in favor of "doing more" have been better-funded and better-organized than those who favor greater restraint, which is one reason why we spend so much on defense and why we find ourselves entangled in intractable conflicts on several continents.

But when I read some early reports about the Obama administration’s health care plans, I began to wonder if the various forces that favor global activism are going to face stiffer opposition in the future. We are likely to have a sluggish economy for some time to come and the U.S. population is getting older. Virtually everyone agrees that serious health care reform is badly needed but will cost a lot. Plus, Obama's various economic recovery measures are going to saddle us all with record deficit levels. Us baby boomers are not exactly noted for our altruism, and my generation is going to put a lot of pressure on politicians to deliver the entitlements we've been promised. All of this means that budget dollars are going to be very tight, and the Pentagon is going to face tougher scrutiny when it brings in gold-plated requests. The Nation and Mother Jones may not be all that formidable a political opponent, but what about the AARP?

One of the great triumphs of Reagan-era conservatism was to convince Americans that paying taxes so that the government could spend the money at home was foolish and wrong, but paying taxes so that the government could spend the money defending other people around the world was patriotic. Ever since Reagan, in short, neoconservatives supported paying taxes to promote a U.S.-dominated world order, while denouncing anyone who wanted to spend the money on roads, bridges, schools, parks, and health care for Americans as a “tax and spend liberal." But if I'm right about the emerging fiscal environment, that situation may be about to change.

TIM SLOAN/AFP/Getty Images

While visiting Geneva last week, I was reminded of how well many aspects of public infrastructure work in Europe. Geneva is beautiful, clean, and the transport system seemed to be a model of efficiency and convenience. I took a public bus to the airport, which entailed walking one block from my hotel to the bus stop and then riding a clean and inexpensive bus for about 20 minutes, ending up right at the terminal. The Geneva and Zurich airports are gleaming, uncrowded, and comfortable. To get from my home to the airport via public transit in Boston, I'd have to walk 12 minutes to a T stop, ride a slow, crowded, and erratic trolley line (the dreaded "Green Line") into downtown, change twice, and then take an airport shuttle bus to reach the terminal. And Boston's Logan Airport, though better than it used to be, isn’t going to win any prizes. Let's not even talk about rail service or health care.

Maybe the differences in public infrastructure between Western Europe and the United States have something to do with the amount of money we spend constructing a different sort of "public infrastructure" in Iraq, Afghanistan, and lots of other places around the world. 

FABRICE COFFRINI/AFP/Getty Images

At the New Yorker blog, Steve Coll reports that the U.S. Congress is preparing a five-year $1.5 billion per annum non-military aid package for Pakistan, with full support from the Obama administration. (You can read the text of the legislation, entitled the "Enhanced Partnership with Pakistan Act," here.) 

This step sounds impressive, until one remembers that Pakistan's population is nearly 180 million and its GDP in 2006 was about $144 billion. So the aid package amounts to around a 1 percent increase in Pakistani GDP, which works out to about $8 for each Pakistani. In other words, the U.S. Congress is going to increase their per capita income from $850 per year to about $858. (It's actually less than that, because some of the money goes to administrative expenses, auditing, and the like.)

This act might have some symbolic value, and I'm willing to assume that a few good things might get done with the money. But let's not forget that Pakistan has already received about $45 billion of U.S. economic and military aid since 1946 (measured in constant 2007 dollars), so it’s not like $1.5 billion today is going to work miracles. Moreover, because money is fungible, even careful accounting can't prevent Pakistan from shifting some of its own resources to other areas, which means the areas we are trying to help (such as education and public health) may not get that much better.

Overall, it's hard for me to believe it will have much effect on the lives of ordinary Pakistanis or do much to erode the endemic anti-Americanism there. Pakistan actually got a big influx of money after 9/11 (due in part to increased U.S. aid and also to a lot of reverse capital flight), yet the increased cash either went to the army or tended to fuel financial and real estate speculation instead of genuine economic growth. Moreover, even with the best of intentions, big aid initiatives like this one are bound to reinforce perceptions that the United States is perennially interfering in Pakistani society, which probably reinforces hostility and suspicion.  

Instead of another aid package, we could probably do more to help Pakistan by removing U.S. tariffs on Pakistani exports (e.g., textiles), which would benefit Pakistani producers and American consumers alike. But that would trigger opposition from domestic interests here, so Congress will just adopt the politically convenient but less helpful step of appropriating more money.

Before I catch up on other developments -- like the new "plan" for Afghanistan/Pakistan, the Netanyahu government in Israel, the G20 summit, etc. -- I thought I’d pass along a few things I learned during my visit to Singapore last week. Here are a few quick impressions, based on my conversations with a number of academics and senior policymakers there, and by a roundtable discussion with Ashley Tellis, Yuen Foon Khong, Vinod Aggarwal, C. Raja Mohan, and myself (sponsored by the S Rajaratnam School and moderated by its Dean, Barry Desker).

First, Secretary of State Hillary Clinton got full marks for her Asia trip last month. The decision to make Asia her first foreign destination was much appreciated (especially given the short shrift the region had received under Bush), and the people I spoke with were also impressed by how she handled herself along the way. Singaporeans are looking forward to welcoming Obama there for the Asia-Pacific Economic Cooperation (APEC) forum in November. If the Obama administration is looking to refurbish ties with various Asian allies (and they should), the groundwork has been laid and the effort will be welcome.

Second, nobody in Singapore seemed enthusiastic about America doubling down in Central Asia. There was some grudging acceptance that the United States still had a role to play there, but even the strongest advocates of U.S. involvement in that conflict saw it as a grim necessity rather than an opportunity. Several officials emphasized that it was important that the United States not get bogged down there. Agreed.

Third, one senior official offered a cautionary note about the recent U.S. opening to Iran. While fully supportive of the initiative, he emphasized that Tehran was bound to drive a hard bargain and that negotiations would be prolonged and difficult. Another person with whom I spoke surprised me by suggesting that if Iran's clerical leadership is interested in dealing with Washington, they will work to ensure the reelection of Mahmoud Ahmadinejad, thereby keeping a "bad cop" in the Presidency to enhance their bargaining position. I would have thought the opposite -- that it would be easier to engineer a detente between Washington and Tehran if Ahmadinejad were no longer in office -- and it will be interesting to see who's right.

Fourth, virtually everyone I spoke with hoped Obama & Co. would get the U.S. economy moving ASAP, and argued that this was the only way to jump-start the rest of the world. This sentiment is easy to fathom (Singapore's economy is heavily dependent on world trade and is projected to shrink by 5-10 percent this year), but I found myself wondering if it is either realistic or healthy of other countries to expect so much from Uncle Sam. The days where the United States could singlehandedly serve as the engine of the world economy are probably behind us, and prospects for a coordinated global response seem increasingly bleak. Although everyone supposedly understands that "beggar thy neighbor" policies made the Great Depression worse, the global response to the crisis has been "every state for itself" and signs of protectionism are beginning to re-emerge. The draft G20 communique reportedly takes a firm stand against this trend, but it is going to take principled and courageous leadership to resist these pressures. All in all, a good test to see if we've learned anything from the 1930s. 

ROSLAN RAHMAN/Getty Images