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Never Heard That Before
As a political barometer, the Davos World Economic Forum usually offers up some revealing indicators of the global mood, and this year is no exception. I heard of a phrase being bandied about here by non-Americans about the United States that I can honestly say I've never heard before: political instability.'Political instability' was a phrase normally reserved for countries like Russia or Iran or Honduras. But now, an American businessman here remarked to me, people ask me about political instability' in the U.S. We've become unpredictable to the world.' Mind you, people at international conferences love to criticize America, poke fun at America and complain about America. It is the only global sport more popular than soccer. But in the past, it was always done knowing that America was this global bedrock that could always be counted upon to lead. But this year is different. This year, Asians and Europeans, in particular, pull you aside and ask you some version of: Tell me, what's going on in your country?' We're making people nervous. Banks, multinationals and hedge funds often hire foreign policy experts to do political risk analysis' before they invest in places like, say, Kazakhstan or Argentina. They may soon have to add the United States to their watch lists. You can understand why foreigners are uneasy. They look at America and see a president elected by a solid majority, coming into office riding a wave of optimism, controlling both the House and the Senate. Yet, a year later, he can't win passage of his top legislative priority: health care. Our two-party political system is broken just when everything needs major repair, not minor repair,' said K.R. Sridhar, the founder of Bloom Energy, a fuel cell company in Silicon Valley, who is attending the forum. I am talking about health care, infrastructure, education, energy. We are the ones who need a Marshall Plan now.' Indeed, speaking of phrases I've never heard here before, another goes like this: Is the Beijing Consensus' replacing the Washington Consensus?' ' Washington Consensus is a term coined after the cold war for the free-market, pro-trade and globalization policies promoted by America. As Katrin Bennhold reported in The International Herald Tribune this week, developing countries everywhere are looking for a recipe for faster growth and greater stability than that offered by the now tattered Washington Consensus' of open markets, floating currencies and free elections.' And as they do, there is growing talk about a Beijing Consensus.' ' The Beijing Consensus, says Bennhold, is a Confucian-Communist-Capitalist' hybrid under the umbrella of a one-party state, with a lot of government guidance, strictly controlled capital markets and an authoritarian decision-making process that is capable of making tough choices and long-term investments, without having to heed daily public polls. Personally, I wouldn't give up on the Washington Consensus so fast. The reason it is ailing is not because of its principles promoting economic openness and trade, many of which China is practicing better than we are lately. It is failing more because of, well, Washington. It was hard to read President Obama's eloquent State of the Union address and not feel torn between his vision for the coming years and the awareness that the forces of inertia and special interests blocking him not to mention the whole Republican Party make the chances of his implementing that vision highly unlikely. That is the definition of stuck.' And right now we are stuck. The sad and frustrating thing is, we are so close to being unstuck. If there were just six or eight Republican senators a few more Judd Greggs and Lindsey Grahams ready to meet Obama somewhere in the middle on deficit reduction, energy, health care and banking reform, I believe that in the wake of the Massachusetts wake-up call the president would indeed meet them in that middle ground to forge not just incremental compromises, but substantial ones on these key issues. But so far, the Republicans are having a good year politically by just being the Party of No. It is a shame because here we are as a country scrounging around for a few billion more dollars of stimulus to help our unemployed and small businesses when the biggest stimulus of all is hiding in plain sight. And that is ending our political paralysis and the pall of uncertainty it is casting over everything from the cost of my health care to the cost of my energy to the way our biggest banks can do business. If the two parties could get together and remove the clouds of uncertainty over those issues, remove the growing sense that our country is politically paralyzed, you would not need another dime of stimulus money. Investment and lending would take off on their own. If, however, the two parties continue with their duel-to-the-death paralysis, no amount of stimulus will give us the sustained growth and employment we need. Posted by: Beavis 2010-01-31 |
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