The consummate politician wowed the still-learning one so much he called her “President Clinton”. Well, if she had been President she might have been representing an administration with more authority than the one in which she is Secretary of State.
Hillary Clinton conceded a point to Murray McCully: instead of just jointly announcing the near-substance-free but usefully rhetorical “Wellington Declaration”, she signed it alongside him at the stagey “press conference” of just two questions a side.
In answering those questions, however, Clinton exhibited a depth of detailed knowledge John Key’s predecessor used to demonstrate in press conferences and interviews. Clinton left the impression that if she had been at the top there would not have been such a big rout of Democrats in last Tuesday’s elections.
Instead she came with diminished authority. What can Barack Obama’s Administration deliver, having lost the House of Representatives majority in a landslide to the Republicans and keeping only a narrow majority in the Senate?
He, and she, do still have wide authority in conduct of foreign policy. Her swing through Asia (we are part of Asia now) was designed in part to underline the United States’ recommitment to engagement in the region after the Bush-years Iraq and Afghanistan distractions. That recommitment is welcome in most of non-China east Asia and in Australasia.
In fact, across the Tasman where the military alliance with the United States is the foundation and corner stone of foreign policy, military bases in the north are being opened to American military to facilitate that re-engagement with Asia. Contrast the “Wellington Declaration’s” slight shift in wording on joint action and exercises with American forces: they still require a presidential waiver. Normalisation is well advanced — was well advanced under the Clark regime — but still incomplete.
But do Obama and Clinton have authority on trade? That was a major focus of the talks in Wellington. For a quarter-century a free trade agreement with the United States has eluded New Zealand. Now the hope is to snare the United States into the P4 (Brunei, Chile, New Zealand, Singapore), with Australia, Malaysia, Peru and Vietnam.
Unlike, general foreign affairs which is conducted under the presidential prerogative, trade agreements need Congressional approval either before or after.
A Republican majority in the lower house could usually be expected to be more open to free trade than a Democrat one. The 2008 presidential candidate John McCain advocated an FTA with New Zealand.
But the Republican landslide owes much to the Tea Party movement, which got an impressive number of its candidates into Republican nominations and into the Congress, some at the expense of mainstream Republicans.
Tea Partiers represent a wave of bewilderment and anger at the huge economic reversal, not a programme or ideology (though most say they want less government). Judging by some Tea Partiers’ comments, they may turn out to be the advance guard of a retreat from international engagement.
Now factor in the United States’ massive budget deficits, 12 per cent of GDP in fiscal 2009, 9 per cent in fiscal 2010 and projected by the Congressional Budget Office at $US1 trillion a year up to 2020, pushing federal debt to $US19 trillion, 90 per cent of GDP. To fund deficits and refinance maturing debt, two weighty American commentators, Roger Altman and Richard Haass, argue in this month’s Foreign Affairs, will require borrowing a “staggering” $US5 trillion a year.
Add $9 trillion of debt in institutions the federal government guarantees and $3 trillion of states’ debt, also in effect guaranteed by the federal government. Factor in the fiscal impact of the ageing population from 2020. Altman and Haass call the outlook “downright apocalyptic”.
Such massive borrowing reduces available funds for investment and so slows economic activity, both at home and, because so much of the borrowing is from foreigners, abroad. Is there a point at which foreigners stop lending? Altman and Haass think so — unless the United States’ dysfunctional political system makes heavy cuts in government spending and raises taxes.
Answering an American journalist on a nuclear reduction treaty at her press conference, Clinton hoped the “lame-duck” Congress, which continues to deliberate until those elected last week take their seats in January, will pass the treaty.
A bigger question lurked inside that one: are we witnessing the beginning of her country’s descent into national “lame duck” status? There are strong arguments why not: it is and will for a good while yet be the pre-eminent consumer market, innovator and military power. But there are fleeting glimpses and faint quacking sounds of the birthing of a lame-duck nation.
We’ve been there, with mother Britain, since when we have slid 20 places in world wealth. A repeat with the United States will not be apocalypse. But it mightn’t be nice.