___________________________________________ Visit Stratfor's NEW Middle East & Africa Intelligence Center http://www.stratfor.com/meaf/default.htm ___________________________________________ ALSO ON STRATFOR.COM Thinking About a Chinese Invasion of Taiwan http://www.stratfor.com/asia/specialreports/special40.htm Pastrana Continues to Fight for Peace With FARC http://www.stratfor.com/world/Commentaries/w9907310135.htm Tangled Web of Alliances Makes the SADC a Poor Regional Peacekeeper http://www.stratfor.com/MEAF/commentary/m9908010159.htm __________________________________ STRATFOR's Global Intelligence Update Weekly Analysis August 2, 1999 First Thoughts on the Presidential Campaign Summary: As the 2000 campaign opens, presidential candidates are struggling to define what they stand for. We are reminded of the 1980 campaign, when Carter and Reagan struggled over issues of fundamental importance to the republic and neither had to take extra measures to define where he stood; the pieces fell naturally. Reagan's victory, in a way, made the presidency much less powerful and important than it had been since 1932. The federal deficit created during and after the Reagan years did not cripple the economy, but it did cripple the ability of the federal government to create new programs. The collapse of the Soviet Union didn't abolish foreign policy, but foreign policy ceased to be a burning issue. Since foreign issues are no longer pressing and since Washington has lost the ability to create new programs, the influence of Washington over the United States is in massive decline. Therefore, the question of who presides over Washington is of only marginal importance. The candidates are unable to define where they stand on the issues not because they are cynical, but because what Washington thinks about issues is not very important these days. We are seeing the first pure post-Reagan election: a competition for a post whose real power over American life is enormously diminished. Analysis: The American presidential campaign has begun. The major personalities that will shape the election have already emerged. What has not emerged are the issues on which the campaign is going to be fought. Indeed, what is striking about the campaign to this point is not only that the dominant personalities have emerged so early, but that it appears the personalities are going to have to generate issues over which to disagree in order to differentiate themselves from each other. The precise issues over which George W. Bush, Elizabeth Dole, Al Gore and Bill Bradley disagree cannot be clearly perceived either in domestic or foreign policy. There are candidates, particularly in the right wing of the Republican Party, who retain clearly defined positions, but what is truly striking is how little support or even interest they are able to generate. Something remarkable is going on. It is not, in our view, that a general national consensus has been achieved. Rather, what appears to be happening is a growing indifference to both the presidency and the federal government itself. The dearth of issues reflects neither alienation of Americans from their society nor indifference to the future of the country. Rather, the dearth of issues in this election reflects the reality that the federal government's ability to shape policies that affect American lives has declined precipitously; therefore, the policy inclinations of the person who will preside over the federal government is of relatively little importance. Regardless of who is elected in the year 2000, their ability to generate significant domestic and foreign policies has so declined that debating policies has become an exercise in pointlessness. American society is alive and vibrantly dynamic, but the engine driving it has diffused across the country. Put simply, what happens in Redmond, Washington, and a hundred such places is much more important and interesting than what happens in Washington, DC. To put this in perspective, we should contrast the 2000 elections with the 1980 elections. The issues dividing Carter and Reagan were inescapable. The American economy was in terrible shape. Inflation and the prime rate were both in double digits, as was unemployment. In foreign policy, the United States, having been defeated in Vietnam just five years before, had also suffered massive defeat in Iran, where the staff of the American Embassy had been taken hostage. The Soviets had invaded Afghanistan and appeared poised to drive for the Persian Gulf. Terrorism was searing Western Europe, where neutralist, anti-nuclear and anti-American sentiment was on the rise. The Japanese economy was moving into high gear, penetrating American markets in numerous areas of technology and driving U.S. manufacturers out of the market. Commodity prices remained at extraordinary levels and shortages of gasoline were common. The issues in the 1980 election revolved around this question: was the United States now in permanent decline? Jimmy Carter, who had made a famous speech about America's "malaise," seemed of the view that the United States had entered an era of scarcity, social and economic dysfunction, and the limits of its power in foreign policy. Carter emphasized the complexity of the problems facing the United States and the likelihood that many of the problems facing the country could not be easily solved and that some of them, like the shortage of natural resources, might never be solved. Ronald Reagan argued that the problems of the 1970s were not rooted in the natural condition of the United States but in policy decisions that had been in place certainly since the 1960s and possibly since the 1930s. On domestic policy, Reagan argued that a tax reduction and simplification of the tax system was essential for the stimulation of capital formation. In addition, Reagan argued that a massive program of deregulation was needed and that this, along with massive tax cuts designed to encourage investment rather than consumption, would give rise to a wave of entrepreneurial activity that would transform the economy. In foreign policy, Reagan argued that Carter had fundamentally misunderstood the Soviets, both morally and strategically. Morally, Carter's argument that we had an "inordinate fear of communism" was rejected by Reagan, who argued that communism was morally degenerate and had to be vigorously opposed. Strategically, Reagan asserted that the Soviet Union represented a geopolitical threat to American interests, but that the United States had the resources not only to contain that threat, but to defeat it. Reagan argued that a more assertive foreign policy, coupled with massive increases in military expenditures on new technologies, could transform the global strategic equation. Carter countered that Reagan's understanding of the problems confronting the American economy were both simplistic and dangerous. Tax cuts and deregulation would not only not stimulate the economy, but would cripple it by creating huge deficits. In foreign policy, Carter argued, the essential mission was to find a basis for reconciliation with the Soviet Union, rather than to intensify the Cold War. Increased defense expenditures would only cripple the American economy while triggering an arms race that neither side could win. The Soviet Union, Carter argued, was a permanent geopolitical fixture that could not be abolished and therefore had to be accommodated. The issues on which the 1980 election was fought did not have to be found or generated by strategists. They were manifest in the moment. Moreover, the pressing issues facing the country taxes and defense were all issues over which Washington had control. It mattered deeply who won the election. Indeed, the 1980 election was, like 1932, a defining moment in American politics that would shape what came after it. Consider: when Dwight Eisenhower was elected as the first Republican president in a generation, he remained trapped in the paradigm created by Franklin D. Roosevelt. Whatever policy shifts he might have wished, the legacy of the New Deal left him little room for fundamental change. Rhetoric aside, Eisenhower was trapped by Roosevelt's policy decisions. Similarly, Bill Clinton, elected 12 years after Reagan, was trapped in Reagan's paradigm. Regardless of what Clinton wished, he was unable to reverse or even substantially change Reagan's paradigm. He was limited by circumstances. He was also limited in mindset. When Clinton proposed the federalization of medical care, the country considered it and then recoiled. Increasing the power of the federal government had no more appeal under Clinton than increasing state's rights had under Eisenhower. Under Reagan, the geometry of American public life had changed fundamentally. Reagan's policies did result in massive federal deficits, just as his critics had predicted. But the deficits did not crowd out private borrowing, driving interests rates up. Quite the contrary, interest rates fell dramatically when compared to the 1970s and have remained extraordinarily low even a decade after he left office. The reasons for this are complex, and many of the most important have nothing to do with Reagan's policies. For example, the massive decline in world commodity prices began well before his policies had any effect. The massive economic dislocations of the 1970s compelled large corporations to restructure in such a way as to provide openings to smaller start-ups. New technologies, many spawned by government programs in the 1960s and 1970s, drove the economy in new directions. As in most things, impersonal social forces had more to do with the course of history than decisions by political leaders. Nevertheless, the general direction Reagan moved the country helped facilitate changes that President Carter had thought were impossible. There were two vital changes that Reagan helped advance. The first was to cripple the federal government. Federal deficits did not affect the general economy the way Reagan's critics claimed they would. But it did effectively drain the federal government of the ability to launch new programs. By redirecting resources into defense spending while simultaneously cutting taxes, Reagan crippled the federal government as an instrument of social change. The economy didn't go broke, but Washington did. The only serious battling was over what cuts to impose on social programs. Washington became effectively irrelevant in social policy. The second change was the destruction of the Soviet Union. We can debate endlessly whether Reagan's defense build-up cracked the Soviet economy apart or whether it would have fallen on its own. The very least that can be said was that the arms race imposed by Reagan did not help the Soviet economy one bit. It certainly contributed to its demise to some extent. What can also be said with certainty is that on Reagan's watch, the Soviet Union went from the aggressively assertive power it was in 1980 to a bare shadow of itself. Now, let's consider these two things together. Under Reagan, two processes were put into place. Domestically, the president became relatively impotent. Since there was no money in the budget for new programs, both the president and Washington in general lost tremendous power over the course of the domestic economy. It was NASDAQ, not NASA, that shaped the generation. In the arena of foreign policy, the collapse of the Soviet Union made foreign affairs less important to the United States than it had been at any time since the early 1930s. Rather than the centerpiece of national life and fears, foreign policy became a side show of random events, unconnected to the daily lives of the people. Franklin Roosevelt had made the federal government the central engine of American life. From 1932 until 1980, the Federal government had a profound and direct effect on the personal lives of Americans. From social security to student loans, from being drafted into the Army to the danger of nuclear war, the federal government defined and redefined the experience of everyday life. What happened in Washington mattered fundamentally and directly. Who was elected President and what he did also mattered. >From 1980 onward, it mattered less and less who was elected President. Even with the much-vaunted surplus, the government is not about to undertake radical new social programs; the national sensibility won't allow it. Without a foreign threat of epic proportions, such as Hitler or Brezhnev, there will be occasional random conflicts without coherent explanation nor lasting effect, but none of them will change the daily lives of Americans. The dearth of issues in the 2000 campaign has to do with the extraordinary powerlessness both of the American presidency and of Washington in general. For fifty years, American history was made in Washington. Today, power has diffused from Washington in general and from government. The diffusion of power has been facilitated by the lack of a serious foreign threat. All of the candidates are struggling to find issues in a vacuum of public indifference driven by the fact that Washington just isn't in control any longer; the policies the policies the candidates propose or oppose are matters of monumental insignificance. One of the reasons that Clinton's behavior was tolerated by so many Americans was not that he was doing a good job, but that it didn't matter very much who held the job. No one worried about Clinton's ability to make split-second decisions about war and peace, or his ability to solve pressing social issues. Reagan had redefined the structure of American governance in such a way that the presidency mattered relatively little. For many, it seemed to follow that the character of the president did not matter. That's why the paradoxical answer of the American public was that Clinton was indeed morally reprehensible but that he should remain in office. This is also why the response to Clinton differed so dramatically from the response to Nixon. Nixon held the fate of the nation in his hand. Clinton did not. It is unclear how long Reagan's legacy will last. Roosevelt's lasted until the massive capital shortages of the 1970s required a restructuring of the American economy and until the last ideological monster of the twentieth century was destroyed. We suspect the current situation to be somewhat shorter. As baby boomers start cashing in their 401K plans, interest rates will rise once again. As the world forms coalitions against the United States, threats to national security will increase. All things end. This period will too. But this much is clear: the elections of the year 2000 are the first mature, post-Reagan elections. Americans are aware they are electing a president who has less power, less control in American daily lives, and less influence in important issues a president who simply matters less than at any time since the 1920s. If even the candidates can't find fundamental issues to debate, it is unlikely that Americans will take the choice all that seriously. The election will turn on the issue of leadership, since the presidency remains a bully pulpit. Leadership without definitive power is difficult to exercise. It is reminiscent more of constitutional monarchs than of the influential presidents we had become used to. Ronald Reagan, by design or accident, took away that power from the American presidency. Until the market crashes or a foreign enemy arises, it just doesn't much matter who the next president is. That is why candidates leap ahead effortlessly without anyone knowing what they stand for. It doesn't matter all that much what policies they support. What matters is whether the public will find their voice and demeanor tolerable over the next four or eight years. ___________________________________________________ SUBSCRIBE to FREE, DAILY GLOBAL INTELLIGENCE UPDATES (GIU) http://www.stratfor.com/services/giu/subscribe.asp or send your name, organization, position, mailing address, phone number, and e-mail address to [EMAIL PROTECTED] UNSUBSCRIBE FROM THE GLOBAL INTELLIGENCE UPDATES (GIU) http://www.stratfor.com/services/giu/subscribe.asp ___________________________________________________ STRATFOR.COM 504 Lavaca, Suite 1100 Austin, TX 78701 Phone: 512-583-5000 Fax: 512-583-5025 Internet: http://www.stratfor.com/ Email: [EMAIL PROTECTED] ___________________________________________________ (c) 1999, Stratfor, Inc.