Foreign Policy Consequences of the Extortionists' Win
The game of chicken that has just played out regarding the budget and debt ceiling, along with the way it played out, is a huge blot on American democracy. I'm not even talking about the bad economic consequences, which began when the game was still being played and will continue in many forms for years to come. I am instead looking at this episode as more of a political crisis and failure than an economic one. Although I have used the chicken-game terminology because those are the terms in which a strategic analyst might describe it, we can can use blunter words in talking about what has happened. An act of extortion has been committed. The extortion was perpetrated by one political element—not a majority of the American body politic—motivated by a combination of narrow pecuniary interest, stupidly conceived notions of wider economic interest and determination to bring about the downfall of political opponents. The extortionists succeeded, using the fiscal integrity of the United States as a hostage and wielding a threat of economic disaster if they did not get their way. However much the result may be sugar-coated as a compromise and the most incorrigible of the perpetrators may still express dissatisfaction that they did not get even more, the threat worked and the targets of the caper caved. The episode is no less an instance of extortion than if the perpetrators had been armed gunmen who took over the Capitol and physically held members of Congress hostage.
The United States has, traditionally and with good reason, taken very seriously the consequences of yielding to demands made by hostage takers. It has made resistance to such demands a matter of policy. One of the major tenets of U.S. counterterrorist policy for many years, unchanged through Republican and Democratic administrations, has been to make no concessions to terrorists and to strike no deals to free hostages. Resisting such concessions is important not only to deter further hostage taking and further demands by whoever is perpetrating the current incident but also to dissuade others from considering the same tactics. The United States has generally adhered to this policy, even at the price of losing the lives of some U.S. citizens who had been taken hostage. The biggest departure from the policy, which was part of what became known as the Iran-Contra affair in the 1980s, certainly did nothing to strengthen U.S. interests and instead weakened them.
Now consider how the recent instance of hostage taking and extortion in Washington, perpetrated by a different variety of extremist, looks as viewed from overseas. The president of the United States has been weakened. He has caved in to extortion, with all that implies regarding expectations of how he will behave the next time he faces similar demands. Most specifically and obviously, the expectation will be that the next time there is political confrontation over fiscal matters, the result will be the same as it was this week. Foreign governments (and investors) will conclude that with increased tax revenues off the table, the United States will never get its fiscal house in order. They also will conclude that the United States simply cannot be counted on to dip further into its resources to accomplish its own goals, let alone shared ones. The next time a U.S. secretary of defense lectures allies about how they should make more of an effort to share burdens, the cynicism and annoyance will be even greater than it was before.
Once upon a time there was a general appreciation among American political leaders, voiced by both Republicans and Democrats, that however much one might disagree with whoever was the president of the day, to a large extent the prestige and effectiveness of the United States overseas was inextricably linked to the prestige and effectiveness of the president. This appreciation was related to the old idea of politics stopping at the water's edge. The perpetrators of the recent extortion over fiscal policy either don't appreciate this concept or simply don't care about it. Anything that weakens or embarrasses Barack Obama is good in their eyes.
Some of the consequences we ought to be concerned about involve a variety of would-be extortionists overseas who have been watching what has been going on in Washington. This might involve terrorists—the kind who literally use guns or bombs. The type of international terrorism that was more prevalent in the 1970s and 1980s, involving the taking of hostages and the making of demands, is less common today, but what played out in Washington can only encourage terrorists to think anew about such tactics. Another extortionist to watch is Kim Jong-il of North Korea. I earlier noted the similarities between the North Koreans and the Congressional Republicans who precipitated the debt ceiling crisis. Those very similarities are what will encourage the real North Koreans to draw lessons from this episode. The North Koreans already have shown that they extract such lessons from U.S. behavior on matters far removed from their own country. Future confrontations and crises with Pyongyang may now be both more likely and more difficult for the Obama administration to manage.