Connecting American Foreign Policy to Economic Policy

This is a thoughtful discussion of the how US foreign policy affects economic policy, both in the US and abroad. Some readers may consider the objectives to be quixotic, in that the aim of the conversation is to envision how the US could shift its policies for the betterment of US citizens economically, as well as, needless to the say, to the benefit of people abroad.

The speakers are all insiders and readers will notice that they drifted into bloodless insider-esee. You will need to translate what they said out of that mode of discourse, since they do present some grim facts, such as the high cost of our Middle Eastern misadventures to veterans, and the eventual high cot to citizens (assuming, of course, that The Powers That Be don’t go full neoliberal and renege on their promises to the troops) and the fact the TPP negotiators made a show of soliciting views of NGOs and other “stakeholders”.

The participants are Robert Johnson of theInstitute for New Economic Thinking, Brad DeLong, Professor of Economics at UC Berkeley, Linda Bilmes of Harvard Kennedy School, Steve Clemons of the Atlantic and Emira Woods, of the Institute for Policy Studies.

Here are some of key points within the discussion.

8:19 The astronomical deferred costs of the wars in Afghanistan and Iraq

24:53 Linda Bilmes: Because of privatization, we’ve changed the social contract of who’s in the military

35:23 Emira Woods: The three-legged stool of American foreign policy (defense, diplomacy & development) is drastically unbalanced

43:39 Brad DeLong: How World War II warped the American vision of the role we should play in the world

58:35 Steve Clemons: 9/11 ended Rumsfeld’s era of hard choices surrounding the post-Cold War military

1:06:20 Can shifting demographics push the U.S. towards a more development-minded foreign policy?

1:10:16 What are the costs and benefits of TPP for the U.S. economy?

1:26:32 Rob Johnson closing statement on the crisis of representation. How do we balance democracy & concentrated economic power?

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  1. TedWa

    When the suicide rates of veterans surpass the deaths in combat, as they have, is there an issue with our role?

  2. digi_owl

    The child (USA) took over the holdings of the parent (UK), basically.

    Since WW2 the great game continued, but now between USA and USSR rather than UK and Russia. And after a brief interlude as USSR reverted to its Russian form, the game is once more apace.

    USA, like UK before it, has gone from being a exporter to a importer, by “virtue” of being the master of the seas.

  3. susan the other

    Interesting. Nobody mentioned global warming even tho’ it is the subject du jour. They spoke in 20th C. terms. So we’re already behind the times, but anyway: It’s not easy being paranoid. I did notice that Linda Bilmes understated the military debt by a good $5 trillion, and instead of talking directly, spoke about “tail” costs. An absurdity agreed upon due to shameful performance. DeLong danced around the need for a draft to make war democratic – what a joke. Clemmons blithered about the privatization of war and Says Law invoked for perpetuity – the perpetuity of the oligarchy do doubt; the Technological benefits of war? – well those are self-licking ice cream cones too. BUT (I scream to wake you up) it is also self-licking to make the right choices and travel the path that should have been taken – where would we be now? Nobody even approached that one. They approached the TPP so lovingly I could have barfed – except for Emira who said point blanK “There is no such thing as free trade.” Thank you Emira. It all comes down to our inner reptile v. the survival of the group. I’m just sorry, as an individual lizard, that we can’t cut through some of this crap.

    1. RBHoughton

      Another fine and thoughtful post. Its a pleasure to find people of similar mindsets and you, Susan, are one of those. Thanks

      On the history of the expression ‘free trade’ I believe I can help.

      The term was invented in the British legislature in 1830s to describe an initiative forced on the government of the day. The Minister had encouraged the people to smuggle to defeat Napoleon’s Continental System. Having done so, he was unable to get them to stop, which meant he had no revenue from trade.

      The deal Robert Peel then made with the businessmen was for ‘free trade’ – they would be relieved of Customs and Excise payments and might reduce prices or increase profits as they liked while the costs of government would be transferred to the people as a Tax on their wages. That was the start of Income Tax.

      1. afreeman

        I agree with your pleasure in Susan. I post to request that you and Micheal Hudson compare notes on the origins of “free trade” As it stands the two of you are 180 degrees apart. Origins are important, at least in this case.

  4. Carla

    Wow. Really depressing. The acceptance of the TPP is particularly galling. I wish that Emira, in addition to pointing out that “There is no free trade” might have said: This is not a trade agreement. This is a world governance by multinational corporations agreement.

    I’ll be very careful before I invest 90 minutes in an INET video again.

    1. OpenThePodBayDoorsHAL

      I too am weary of “polite company” discussions that skirt the very hard truths about the state of our affairs and the obvious causes behind them. When the US Army napalmed villagers in Vietnam we knew what to do: get goddamned mad. Today we have the epic theft of our futures by corporate cabals, whether it’s the TPP, Wall St, the Surveillance-Industrial Complex, the Congressional Military Industrial Complex (as it was called in the original draft of Eisenhower’s speech) and instead of throwing Molotovs and smashing windows we sit politely in audiences and debate how many angels can fit on Hilary’s (and Rupert’s) pin. The time for “meaningful analysis” and “policy options” is long past, people are moaning about how to stop ISIS, how to stop global warming, when there’s one immediate obvious first step: stop subsidizing them. Instead we’re told more bombs is the answer, more spying is the answer, more massive fossil fuel subsidies, more multi-trillion dollar wars to get oil. The 1% gathers in Paris to perform “hey look we’re doing something” Kabuki and the rest of us think “oh isn’t that heartwarming”. When your kid asks you “what did you do in the war, Daddy?” the answer is hopefully not “Nothing”.

    2. Yves Smith Post author

      Yes, I did not want to chide the speakers in my intro, but this seemed to devolve rapidly into Beltway tropes, when I had thought the idea was to get beyond that (both Taibbi and I had been invited to participate, and I dunno re him, but I had scheduling problems, plus I’m not keen about webcast as a genre. It tends to reinforce the impression that the speakers are outsiders and don’t have better platforms.

  5. Paul Tioxon

    The US Military and its in house think tank have concluded that climate is a threat multiplier. They have also concluded that military bases should not be connected to surrounding power grids. As a recent report about Turkish-Russian relations indicated, Turkey had no problem in turning off the electricity to the US bases that could monitor their attack against Greece. We can’t trust our allies, we certainly can’t expect any better from enemies. The big story about military spending is how much is going into solar power, PV panels and wind turbines, fuel cells, etc. This is producing a trained workforce of not just guys handy with their hands, but all of the engineering needed to plan, monitor and maintain an internal local power grid on a base that that houses 10s of thousands, just like town or small city could. When these vets go back into civilian life, they will trained to build out the alternative local grid.

    “Kings Bay’s solar panels are only the latest in a series of newly announced solar projects, part of a military-wide renewable-energy binge that has been gaining intensity in recent months. From Florida to California, defense officials are signing contracts with local utilities for huge solar and wind ventures inside military bases or on land nearby.

    The Pentagon said it is seeking to generate its own power in part to enhance energy security at a time when traditional electric grids are under the threat of cyberattacks. But because of their sheer size, the projects are unavoidably affecting energy markets elsewhere in the country, driving down costs for renewables and dampening the demand for new power plants that burn natural gas or coal.

    “We’re in the middle of a perfect storm — a perfect, positive sunlight storm,” said Dennis McGinn, the Navy’s assistant secretary for energy, installations and environment, who helped break ground for the Kings Bay project on an overcast morning last week. “We look forward to doing a lot more of these.”

  6. Russell Scott Day/Founder of Transcendia

    I want more than anything to thank Yves Smith for posting this. The list of key points were an excellent epilogue.
    You, or at least I, was hopeful that someone like Bernie Sanders, or really any of the people lining up in the contest for roles in control of great power now watched this, for it was important.
    My question to myself was what was it most that I needed to know now that I got from this, and it would have to be the loss of war expense responsibility and accounting. The control of the policies by the military. The near impossibility that we as citizens will be able to reclaim meaningful power over our shared destiny.
    I knew these things, but did not know these things.
    The thing I can offer is that while it is Corporatists against Nationalists, it is the Nationalists that have their fingers on the nuclear triggers. I believe that the one thing that the beatniks knew, was that the atom bomb changed everything. (Let us believe that it is still national leaders with the final bit of button pushing capability.)

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