At this stage, as I’ve said, I think a Kerry victory would produce the worst of all possible worlds – responsibility without power. The alternative looks awful, but I thought I’d sketch out the optimistic scenario, which is, roughly speaking, a repeat of Reagan’s second term.
In his first term, Reagan was, in many respects, worse than Bush has been. His buildup of nuclear weapons, undertaken with the support of advisers such as Perle, ran a severe risk of destroying the entire world. In economic policy, he discarded the mainstream Republican economic advisers and went for what George Bush senior called “voodoo economics”, massive tax cuts undertaken on the basis of the supply-side economic theories of people like Arthur Laffer and Jude Wanniski. This produced a peak deficit equal to 6.2 per cent of GDP in 1984, considerably higher than the peak under Bush so far.
In his second term, Reagan ignored his foreign policy advisers and signed the Intermediate-Range Nuclear Forces Treaty with Gorbachev. Whereas Perle and others saw Reagan’s rhetoric about bargaining from a position of strength as mere words, covering the creation of a nuclear capacity that could fight and win the inevitable showdown with Russia, Reagan actually believed it, and when he found a suitable partner in Gorbachev he put it into practice. START I, initiated by Reagan and Gorbachev, followed in 1991.
Meanwhile, on economic policy, Reagan listened to his mainstream advisers and took steps to wind back the deficit. He left the US with a big increase in public debt, partially unwound under Clinton, but the outcome was far better than it would have been if he hadn’t changed course.
At about the same time, the Plaza Accords produced a concerted policy of depreciating the overvalued US dollar and reducing the trade deficit.
What are the chances that we’ll see something similar from Bush? In foreign policy, this would entail a shift towards bilateral or multilateral peacemaking, and in domestic policy, a serious attempt to balance the budget and the trade account. In my judgement, close to zero. But I’d be interested to hear what others have to say.
John Quiggin 
The are important differences between Reagan and Bush.
1. Reagan had a sensible Secretary of State, in George Schultz. Reagan had other sensible advisers like James Baker. Bush, on the other hand, is about to appoint Paul Wolfowitz as Secretary of State.
2. Reagan had an ally in Margaret Thatcher, who, while bad, was not mad, and he respected and listened to her. Reagan had other serious European allies like Helmut Kohl. Bush, on the other hand, thinks of Tony Blair like a useful (for now) farm animal, and his other main European ally is Silvio Berlusconi.
3. Reagan could negotiate with Gorbachev. There were clearly defined disarmament goals that both sides wanted to achieve, and did. There is nothing for Bush to negotiate with Al Quaida, even if he was of a mind to, which he is not.
4. Reagan appealed to the religious right for political gain, but he wasn’t one of them. Reagan’s other wordly advice came from Nancy’s astrologist. Bush, on the other hand, really believes he is on a mission from God, or so it appears.
The grounds for optimism are thin indeed.
Agreed, no optimism. It will be a full court press. No space for anyone to manouvre. The agenda, if you can call it that, will continue in an accelerated pace. For four years they governed like they had a mandate, now they have one.
Sounds similar to another government I know.
Looking at the CNN statistics, it could be Nader’s fault again.
I do not know how in good conscience the citizens of the US can vote for Bush.
One factor that John Q omits is the effect of the Iran-Contra scandal on Reagan’s second term. The ideologues like Perle and Poindexter who hatched this scheme were cleaned out, and left to cool their heels in various think-tanks while they waited for the chance to produce a similar debacle for George W Bush.
Perhaps the Babylon quagmire will be Bush’s Iran-Contra, discrediting the neo-cons and forcing a strategic re-think. Unlikely, but considering the alternative, I’ll clutch at any straw.
However, I do agree with John Q about a Kerry presidency, unlikely though it now is. A minority of the popular vote, a hostile Congress, on top of which he would inherit the responsibility, and hence the blame, for the chaos in Iraq. We’d be nostalgic for the halcyon days of Jimmy Carter in no time.
Deep down I think Chirac and Schroeder will be as comfortable with a Kerry loss as Putin will be with a Bush win.
With Bush’s second term, Howard’s win here and Blair (who is really a conservative in disguise) in Britain, I think there’s a big message for students of English-speaking countries. The sixties are now, officially, dead.
The ideals that the secular left/US liberals cling to no longer convince the population. The people have spoken and loudly.
You’re finished guys, face it. A historical curiosity. The only thing that’s going to get you out of this dark hole is a complete re-think of your entire ideological position. Unless you can come up with some fresh ideas, I fear it’s all over.
In his first term, Reagan was, in many respects, worse than Bush has been. His buildup of nuclear weapons, undertaken with the support of advisers such as Perle, ran a severe risk of destroying the entire world.
And it didn’t and you were wrong. Sound familiar?
Fine grasp of probability theory, Murph. You should take up Russian roulette. Not only are the odds in your favor, but, it you lose, you’ll never know it.
I think at this point I’m going to go out on a limb here and call the election – for Osama Bin Laden. OBL (as many now affectionately refer to him) controlled the key election issues from the very beginning. His ultimate victory can be seen in the way Bush and Kerry have been forced to move towards him in both their policies and rhetoric. OBL has ensured that his key political objectives of weakening the United States and isolating it from the rest of the world will be implemented in full. All that remains is for the americans to graciously concede defeat.
On the theme of “Is a second term poisoned fruit? ”
W is very resentful and insecure. He nows feels he has a mandate of > 3.5 million votes. He has a larger margin in the House and the Senate and he is going to appoint a couple of Supreme Court judges. He is surrounded by sycophants (Rice) or nasty ideologues (Rove and Cheney). So I expect that the general theme of his second term will be war on anyone who dares disagree with him.
On Iraq, I expect a phony declaration of victory followed by a quick exit and a descent into chaos there. Renewed support for the Likud’s policies. On the economy, another push for income tax cuts and a “privatization” of Social Security, followed at some point by a crisis of the dollar, the highest inflation since the late 70s, and then sharply higher interest rates. The next Republican candidate — the only comfort of this miserable election is the prospect of seeing Frist, Pataki, Giulani, Jeb Bush, and Schwartzenegegger fighting it out for the 2008 nomination — will face a very difficult situation including the likelihood of a terrorist attack that cannot be blamed on Clinton.
I agree with the (cynical, but insightful) post above that Chirac and Schroeder secretly appreciate a Bush victory. It is the only thing that makes them look like world leaders.
Yes FOX. Balanced, fair and spot on. Is Americans safe now?
(re two up, nice rejoinder John!)
John M, why on earth would the US ever leave Iraq. They are not going back to Saudi, surely?
With Wolfiwitz as Sec. of State,the Neo-Cons and their Likudnik/Zionist allies will be free to pursue their militaristic policies in the Niddle East,and this will seal the fate of the House of Saud. I suggest readers of this column should look at “Sleeping with the Devil;The Coming fall of the House of Saud ” by Robt Bahr.. He’s a former CIA analyst,who sees the end of the Saudi royal house,as a major event which is likely in the near future. With it’s fall the whole of the Middle East will be convulsed and the economic consequences for the USA and it’s Israeli allies will be profound. I agree with another writer who said that the real winner is O.B.Laden,who must be drinking whatever toasts he allows himself to victory ,in Tora Bora,or Karachi or Riyadh or where ever.
Do you mean the “Democracy Plaza” accords or some others?
Sorry couldn’t help myself (“Democracy Plaza” just seemed a little too “American”)
Tim g, the problem with Bush actually getting out of Iraq is that we appear to have plans for a number of “enduring bases.” If Bush really wanted an exit strategy at all, he’d have scrapped these mortar-magnets by now.
A little prognostication:
The most optimistic Iraq exit scenario is that enough adults get into Congress at the midterm elections to cut off the funding for this little Mess-o-Potamia adventure. Given the tendency for Bush’s approval ratings to trend downwards, this may be more likely than people think.
They will leave Iraq because Bush and his clan will eventually conclude that: (i) the casualties are too high; (ii) the fiscal cost is too high; (iii) they “won”; or (iv) some combination of the above. Once the elections (fair enough, I am assuming that elections will be held) then a declaration of victory is inevitable.
Nobody’s leaving Iraq. There’s oil there. The issue is how to get the oil out via the right (US Republican-supporting oil companies) channels. The rest of Iraq doesn’t matter. Options include a repressive but loyal puppet govt. or direct rule. Traditionally the US has favoured the former.
It looks as though a second-term Bush will face the familiar problem of empire; conquest is expensive, and requires the plunder of further conquests to pay for it… As I have commented before, I am much more concerned about a US govt. flying the Jolly Roger than I am about a few terrorist gangs. Or Al-Quixote, if he exists.
I would expect, therefore, that instead of being rewarded for unswerving loyalty, Australia will be presented with a bill. This may take the form of large-scale US acquisition of Australian assets, or demands for more troops, or both.
JQ wrote “At this stage, as I’ve said, I think a Kerry victory would produce the worst of all possible worlds – responsibility without power”
Spot on – ‘responsibility without power’ is the scourge of the Australian political system. Thank heavens Howard now has control of the Senate so he has the power to exercise the responsibility he’s been given.
Bush does not change policy course unless forced to by overwhelming political pressure. Meantime Bush seeks to re-align politics towards the Right wing of the REP party. They must do this now as demographic forces are against them ie empower minorites at home, anti-americans abroad.
Only a run on the dollar, or a default on debt servicing, would force him to shift to a more balanced fiscal/mercantile policy. But the Asians seem happy to dump their excess savings into the US Treasury’s lap, so long as US consumers soak up Asian employment.
Only a collapse in US military recruiting would force him to cave in on multilateral diplomacy. But the Pentagon is replacing manpower with firepower.
Only an uprising by the Arab Street would force him to concede land to the Arabs. But Sharon and the Likud will feel empowered to “Just Say No” to Palestinian rule. Even Bin Laden is looking conciliatory.
Only a series of Congressional losses or defections would force Bush to “reach accross the aisle” and moderate. But REP party discipline and base mobilisation is awesome.
Bush’s Norquist–Rove policy platform is, following the Garbler/Krugman/Confessore theory, is to consolidate REP governmental hegemony by maximising the political power of the REP social base:
animate Republican political base: Class War tax-cuts for Capitalist fat-cats, Culture War moral laws for Christian Bible-Bashers and Terror War missions for Caucasian good ‘ole boys
decimate Democrat political base: “starve the beast”; privatise government, freeze out unions, strike-out the trial lawyers,
They prefer to seek narrow majorities and govern policy to the extreme on the theory that this pushes the whole frame of politics to their side of politics. This theory appears to work.
In four years time the US economy will be powering along. The situation in Iraq will have improved dramatically and the war on terror will be on-going. The Democrats and the ALP will not have worked out how to connect with the majority of voters because they are more concerned about service records and SIEV-X’s (Oh My God – the right are liars etc. etc.). And the conservatives will roll into power again.
One thing the Democrats and the left won’t do is look to Tony Blair’s model of socialism that is electorally succesful because he is a mate of Bush’s and a War Monger – No way, not talking to that bastard! And hopefully the conservatives in the UK will have rehabilitated themselves from the schlerotic rabble that they are into a viable alternative government.
The future looks extremely positive.
All this gloom and doom – “look at the size of the deficit will ya” – stuff reminds me of my 3rd year economics lectures at UWA back in the late 1980’s when we had this Scottish Keynesian lecturer who was a real Hanrahan – We’ll all be doomed. “Australia’s never going to achieve the growth rates required to get itself out of the fix it is in.” “The US Economy is a basket case an the tax cuts are irresponsible.” Strangely I wasn’t motivated to use my Econs degree to be an economist!
Time for all you lefties to go into the room of mirrors and have a good long hard look at yourself.
There is some truth in what Razor says about “well all be rooned” style pontificating. The global economy will only get better with two billion high-IQ and consumer goods hungry Asians participating, or about to participate, in its pecuniary offices.
And, given recent improvements in info-tech, bio-tech and nano-tech, it is likely that commercially lucrative technological revolutions are already in the works.
Many of the national imbalances that Pr Q frets over can be counterweighted by the global balancing effects of international finance.
Still Bush is one to take risks, and as we have seen in Iraq these do not always pay-off. One day he is going to take a risk, or fail to hedge his bets, in such a way as to see quite a few of the shaky house of cards come tumbling down.
In particular, the US is at the mercy of volatile trends in Arabic cultural and Sinoid finacial systems. A nasty turn of events in these areas could expose the US’s vulnerable position, and take a lot of collateral agents down in the process.
Christ Jack, you feeling alright?
I believe we are only at the start of an economic boom that will last for at least a generation powered by the Chinese and possibly Indians, that will make the 90’s boom look like a hop. And Australia is the best placed western economy to drag along. What Japan did for us in the sixties but bigger by magnitude. And my clients are well positioned to particpate. Go you good thing!!
Playing texas holdem right now is a great idea, i thing!
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