Wednesday, December 5, 2018

Mourning The Death Of The New World Order

I think this is behind the apparently bipartisan and intense outpouring of mourning over the death of 94 year old George H.W. Bush, indeed with some of this even being for the broader post-World War II era in which the US predominated over the world.  Bush was president when the long Cold War with the former Soviet Union came to its end with the victory of the US and the breaking up of the USSR, as well as being the last president to have been a veteran of WW II, and a highly decorated one at that, leaving only Bob Dole as a major political figure still alive who is a veteran of that increasingly distant war that ended with the US clearly on top of the world economically and politically.  While the Bush family has reportedly promised to avoid criticism of President Trump at later today's funeral, who will attend if not deliver a eulogy, iit is both the personal contrast between Bush and Trump that is propelling this high level of mourning, the general personal decency of Bush with the utter lack of any on the part of Trump, but Trump's role in apparently pushing forward the dissolution, or at least serious weakening of that order that Bush supposedly oversaw the beginning of at the end of the Cold War, a period when the US moved into a position of complete leadership with Francis Fukuyama even declaring that we had come to the "end of hisotry" as lwesttern-style iberal democracy seemed to sweep all before it.

For all of his personal decency and moderation, as well as his generally capable and cautious handling of foreign affaris, Bush can be criticized for many things, mostly regarding domestic matters.  He opposed the Civil Rights Act at the time it was being considered, although he later regretted that.  His campaign ran the infamously racist Willie Horton ad when he ran for president in 1988.  He ignored his own warnings about how Reagan's claim that he could cut taxes, increase defense epending, while reducing the budget deficit amounted to "voodoo economics," to join the Reagan admininistration as vice president and then promise "read my lips, no new taxes" while running in 1988.  Of course he damaged himself politically by violating that promise in a budget deal in 1990 that involed raising taxes, with this preceding an economic downturn that led to his defeat by Bill Clinton in 1992.

Nevertheless, despite these and other flaws, the contrast with the current incumbent, and on some matters with his own son, George W. Bush, GWH Bush looks on many matters like the epitome of wisdom and caution.  He did not crow as the Berlin Wall fell and the Warsaw Pact broke up and the Soviet Union came to an end.  Rather he negotiated a reasonable nuclear SALT treaty with Soviet llleadr Gorbachev as it wound down.  He moved to support the entry of the nations coming out of the Soviet breakup into various international organizations.  He quietly aided the reunification of Germany, which has turned out to be a peaceful power.  He did not invade Iraq at the end of the first Gulf War.  He afreed there is a problem with global warming and supported improvements in environmental legislation.  He took a fairly even-handed position vis a vis Israel and the Palestinians and supported negotiations that would eventually lead to the Oslo Accord under Clinton. He supported negotiaions for expanding freer trade and the establishment of the World Trade Organizaion, again also completed under Clinton. He did not repeatedly lie or personally excoriate enemies or denouce the press as the "enemy of the people."  Indeed, even as he climed not to be a "visionary" and merely competent and relliable (which he mostly was) he coined the term "New World Order" or at least advocated it, with this largely open and democratic order now apparently falling apart in a wave of nationalism and authoritarianism now spreading, with the apparent enciiuragement of our current president.

This new turn arguably started with the ascension of Vladimir Putin in Russia at about the same time that Bush's son became president, although Putin's authoritarian tendencies only gradually showed themselves over time.  But Trump's embarrssing and apparently corrupt fawning oveer Putin has highlighted the current state of affairs.  China never stopped being nationalist or authoritatian, but power seems to be being centralized under President Xi even as China's position rises in the world, with it playing at being the defender of at parts of that New World Order as Trump so blatantly runs from it with such moves as his withdrawing of the US from the Paris Climate Accord as well as his trade protectionism policies as well as various international nuclear agreements from Iran to the INF with Russia.  Even as Trump will now face some limits on his activities with the Dems taking control of the House of Representatives in the midterms, and he seemed imostly solated at eh G20 summit, in many countries authoritarian nationalists resembling or even openly imitating him are comintg to power or increasing their power, including in Hungary and Poland and Italy, as well as Turkey, Sauddi Arabia, India, and most recently and dramatically Brazil, where Bolsanaro promises to follow the US in withdrawing from the Paris Clinate Accord as he plans to ignore indigenous rights while engaging in massive deforestation in the Amazon rain forest.  Several of Trump's strongest critics seem about to lose power or becoming serously weakened, including May, Merkel, and Macron. 

Supposedly he has achieved a truce with China on his trade war with them.  But the sharp decline of the US stock market yesterday shows that many realize that this may be a meaningless flop along the lines of his nuclear agreement with North Korea and his trade war truce with the EU.  In both of these latter two we were supposed to get negotiations, but none have occurred yet, and it is not clear any well.  Mostly what we have seen is the lowering of tensions that Trump himself artificially escalated.  This "deal" with China looks to be no different: the removal of a dangerous threat Trump made with a promise of future negotiations along with a promise that China will buy more US soybeans, which was probably goint to happen anyway.  Even his replacement deal for NAFTA seems in danger of coming apart, despite it being officially signed by Trump and Trudeau and Pena-Nieto (the latter on his last day as Mexican president), as it now looks as though the incoming Congress is not keen on approving it.

So the we see the widespread mourning for the late senior President Bush, as the world seems to be moving to being run by loudly nationalist and authoritarian leaders.  Increasingly the danger seems not to just be trade war but war war.  Let us hope that the worst of this will not come to pass, but that New World Order that the late President Bush supported seems to be passing for good, despite its various flaws and hypocricies, and there is probsably good reason to mourn its passing.

Barkley Rosser


Anonymous said...

Sincere question: were the 1990 tax increases the right steps to take at the time? I know that there was an economic downturn that Clinton capitalized on, but in retrospect it was modest; was there a genuine risk of worse outcomes from not raising taxes at that time? said...

It is a great irony that Bush was the victim of the implementation of the voodoo economics that he warned against but went along with. Reaganomics had led not only to high deficits, but more tellingly to a high interest/GDP ratio of 3%, the highest since WW II and higher than any since (we are less than half that now, although rising again). It needed to be gotten down somehow sometime, and Bush made the move, with Clinton following up further in his presidency.

Probably the recession he faced was due more to a tightened monetary policy than to the tightened fiscal policy that he implemented, as Clinton did not have a recession after he raised taxes. But Bush blamed Greenspan for his defeat, and he may not have been mistaken in that view.

2slugbaits said...

I never bought the argument that the 1990 tax increase caused the recession. For one thing, the recession started in the summer of 1990 (coincident with Saddam's invasion of Kuwait) and the tax increase didn't go into effect (FY1991) until the recession was well under way. The Fed's effective Fed Funds Rate had be drifting down for a year before the recession and fell to around 8% when the recession hit. Inflation was a little north of 4% when Bush went along with the tax increase, so the Fed clearly had some room to cut real rates if needed. I think it's more likely that the economy fell into recession because of external supply shocks, with Saddam's Aug 1990 invasion and the subsequent Gulf War being the biggest shocks. But remember that Europe was reorganizing at the time, so there was a lot of economic uncertainty.

I never bought the argument that the recession cost Bush the election. GDP growth in 1992 was pretty strong (around 4%). I suspect that what cost Bush the election was Ross Perot syphoning GOP votes.

Jim Walker, Realtor said...

I agree. Ross Perot won 18% of the popular vote. Bush and Clinton were close in the low 40s. If most of his voters had gone for Bush in a two way race, if HR Perot had not run, Bush would have been a two term president. said...

The 1990 recession actually started in July 1990 just before the invasion of Kuwait. The brief spike in oil prices with that invasion probably goosed it a bit, but it was happening without that, a fact many do not know.

Ross perot certainly did not help Bush, but it remains unclear whether he took more from Bush or from Clinton.

Calgacus said...

What is more interesting is why Perot pulled out and then jumped back in. Bizarre behavior; hard not to suspect some hidden story. That is what cost Perot the election. For it is nearly universally thrown down the memory hole that Perot was the front-runner before this - he was ahead of both Bush & Clinton. Our miserable duopoly looked like it would fall.

Anonymous said...

George HW Bush proposed the negotiation of the North American Free Trade Agreement (NAFTA) which proceeded in secret. Bush Sr promised that standard setting to protect the environment, consumer protections and labor laws would not be compromised. Mexico subsequently lost critical levels of forest cover with 3 million acreas of forest and jungle lost annually between 1993 and 2000.
Debt was endemic to the industrial system at the time and continues to be. Bush Sr vetoed measures to increase the minimum wage in interstate commerce but at the same time proposed a $164 billion bailout for bankrupt Savings and Loan organisation. Bush Sr's friend, Henry Kravis and his partner Michael Milken were responsible for a massive rise in worthless junk bonds and the US federal government became one of the main owners of them.
Brenda Rosser