July 17, 2007

OPPORTUNITY ALWAYS KNOCKS:

Still No.1: Wounded, tetchy and less effective than it should be, America is still the power that counts (The Economist, 6/28/07)

EVEN the greatest empires hurt when they lose wars. It is not surprising then that Iraq weighs so heavily on the American psyche. [...]

Nor is it just a matter of geopolitics. American bankers are worried that other financial centres are gaining at Wall Street's expense. Nativists fret about America's inability to secure its own borders. As for soft power, Abu Ghraib, Guantánamo Bay, America's slowness to tackle climate change and its neglect of the Palestinians have all, rightly or wrongly, cost it dearly. Polls show that ever fewer foreigners trust America, and some even find China's totalitarians less dangerous.

A sense of waning power is not just bad for the self-esteem of Americans. It is already having dangerous consequences. Inside the United States, “China-bashing” has become a defensive strategy for both the left and the right. Isolationism is also on the rise. Most Democrats already favour an America that “minds its own business”.

Outside America, the consequences could be even graver. Iran's Islamic revolutionaries and Russia's Vladimir Putin have both bet in different ways that a bruised Uncle Sam will not be able to constrain them. Meanwhile, a vicious circle of no confidence threatens the Western alliance: if Italy, for instance, concludes that a weakened America will not last the course in Afghanistan, then it will commit even fewer troops to the already undermanned NATO force there—which in turn prompts more Americans to question the project.

Yet America is being underestimated. Friends and enemies have mistaken the short-term failure of the Bush administration for deeper weakness. Neither American hard nor soft power is fading. Rather, they are not being used as well as they could be. The opportunity is greater than the threat.


The Economy Gets No Respect (James Pethokoukis, June 28, 2007, US News)
The economy is reaccelerating after a bit of a soft patch, unemployment is low, and the stock market is near record highs. Yet poll after poll shows people are sour on the economy. An American Research Group survey last week found that 55 percent of respondents say the economy is "getting worse" vs. 16 percent who say it's "getting better." And the recent Conference Board numbers on consumer confidence fell to a 10-month low. To help figure out what is going on here, I dropped an E-mail to Bryan Caplan, an economist at George Mason University, coauthor of the EconLog blog and author of a new book, The Myth of the Rational Voter: Why Democracies Choose Bad Policies. Is it Iraq? Is it gas prices? Caplan gives me his two cents:

"Key starting point: It's 'normal' for people to think the economy is doing worse than it really is. The puzzle is why people are 'especially' pessimistic about the economy when it's doing pretty well. I haven't studied recent trends enough to say with any confidence, but I suspect that your Iraq and gas price stories are the main reasons. Pessimism about Iraq is spilling over to other areas, and people greatly exaggerate the importance of gas prices because they're so visible."


One of the mistakes the Administration has made in the Middle East is to be insufficiently ambitious and triumphalist. Not only did we fail to welcome the Palestinian elections as a victory for Reform but we've left enemies, like Baby Assad, in place. The combination makes victories look like losses and leaves us dwelling on Iraq instead of moving on to the next regime change.

Posted by Orrin Judd at July 17, 2007 11:59 PM
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