The Outlaw President & The Third Wave of Reform

The enduring (and endearing) Ur-Myth of the US is the Cowboy, exemplified in movies such as Shane or High Noon.  The paradigmatic Cowboy does his duty, solves the problem, and leaves.  He does not do it for money, or power, or even love; but because it is the right thing to do. 

Reagan embraced the Cowboy, and led the First Wave of Reform of the Great Unwinding of the Progressive Era.  Newt Gingrich led the Second Wave of Reform, when the Republicans captured Congress in 1994 under his Contract With America.   Bush was expected to lead the Third Wave of Reform, but instead of embracing the Cowboy, he became the Outlaw.  The consequences of this will be felt for decades.

The Republican victory in 1994 directly led to the Greatest Asset Mania of All Time.  It began in November 1994, right after this victory. President Clinton was considered 'irrelevant'. His first two years had been a bust, as he focused on Liberal issues such as nationalized healthcare and gays in the military. Triangulating on the Republicans, in the next few years he championed Republican issues such as welfare reform and free trade, recovering his Presidency - and helping drive the Republican Second Wave of Reform.

Bush came in with great promise in 2001, as the Republicans expected the Third Wave of Reform to complete the Reagan Revolution. Instead, they got an even worse record than the very model of a modern Liberal President, LBJ: an even higher growth of domestic spending; the first new entitlement in decades; stuck in an unpopular land war in Asia; and the wrong sort of tax cut, a budget-busting redistribution of wealth with a negative supply-side benefit. (The dividend tax cut removes a tax shelter which had allowed growing companies to retain their earnings, and instead makes them subject to shareholder demands for dividends, putting them into the clutches of the sharks on Wall Street to raise growth capital. Microsoft, for example, is now under constant pressure to redistribute its cash flow in dividends, whereas previously it could reinvest in its business.)

Now Newt Gingrich is mounting a Presidential campaign. He does not stand a prayer of winning against a Mitt Romney or John McCain, but his mission is to put reform back in the Republican agenda. It says a lot about the political situation that the most likely candidates in 2008 will run against Bush's legacy, not on it.

Much of the damage can be fixed, but there is a part of it that will linger for years. The primacy of the US in world politics has been undermined by a pervasive sense of unilateralism and American exceptionalism - if not lawlessness. We spent 50 years building world institutions under law. China and India voluntarily joined these institutions - we did not have to fight a world war nor a cold war to bring half the world's population into these institutions. Fundamental to this new world order is that the rules apply to the members - the US is not King, and is not above the rules it created. Yet Bush, even before 9/11, opted out of the world community on issues such as the Kyoto Treaty and the International Criminal Court. One cannot fault his administration for specific decisions - Kyoto needed to be rejected - but for opting out of the process. After 9/11, this unilateralism was accentuated. Again, this is not about the specific decisions - perhaps the rationale for invading Iraq was not substantiated, although it may turn out that the WMD were moved to Syria in the buildup to the war - but about the process to get the world community in support. It clearly was a fig-leaf to cover a decision already made, regardless of how the world institutions responded. And it may have caused a counter-reaction by France, Germany and Russia to build a counterweight to American hegemony.

Whereas Reagan was the Cowboy, Bush is the Outlaw.  It may take a Cowboy to come back and fix the mess.

Comments

[Peter Williams]

Although the allusion to the great open spaces of the wild west frontier implied by both "Cowboy" and the "Outlaw" certainly suits the current and past incumbents, the landscape does need to be reconsidered.

The issue is to create a vibrant economy, built on the creation and growth of value, that does not require an ever expanding frontier of consumable resources. This goes hand in hand with the re-examination of the ever more complex and abstract financing constructs that prop up our rather outmoded accounting systems designed to stop pilfering of the days profits in the fourteenth century

At some point the word "finite" has to appear in conjunction with resources, at which point the old land grab mentality can finally be put to rest and the real value of human endeavour Adam Smith wrote about can be created.

Perhaps this will be the catalyst for the human race to have the two major ephianies that will transform the culture, cheap fusion power and cost effective space travel.

Until then, we have got to work with what we got!