Opinion

Ian Bremmer

Goodbye Department of Commerce, hello Department of Economic Statecraft

Ian Bremmer
Aug 22, 2012 16:03 UTC

Whether it’s Barack Obama or Mitt Romney who wins the next election, there is already a vacancy to fill in the president’s Cabinet. With the resignation of John Bryson in June, thanks to a hit-and-run accident apparently caused by a medical issue, the Department of Commerce is being led by an acting secretary, Rebecca Blank. Yet after the initial scandalmongering about Bryson’s departure died down, nary a peep has been uttered in the media about the department’s fate or future.

In other words, the Department of Commerce’s real problem is not a lack of leadership, but a lack of mission-a weakness that means Commerce isn’t making the most of its roughly $10 billion budget. In today’s world, everything – geopolitics, national security, foreign policy – is increasingly being viewed through the lens of our economic interests. The United States has a powerful bureaucracy devoted to international diplomacy and a gargantuan one devoted to national defense, but a near-total vacuum when it comes to global economics.

For a long time now, as conservatives have tried to scale back the size of the government, they’ve also argued that America’s businesses need to be unencumbered from government regulation. They worry about how the government’s intrusion into business will harm our competitiveness abroad. However, the idea that’s been neglected is that the government, through industrial policy, can protect and advance the interests of the private sector abroad, too. The global, U.S.-led economic institutions that arose from the ashes of World War Two have truly become global. Thus they’ve stopped protecting America’s interests abroad. Structurally, our business sector has little to no support from the government when it comes to finding customers outside of our borders. To remain competitive, especially with the state-run economy of China, that has to change.

Again, the three-legged stool of United States interests abroad – diplomacy, defense and business – is currently missing a leg. Is it any wonder that the country has remained influential and militarily superior, even as its economy cratered during the financial crisis and has only sluggishly and half-heartedly recovered? While the Department of State attracts the best and brightest minds, and the Department of Defense is unrivaled in the world, Commerce has not exactly been a haven for global economic thought or leadership.

What I’m suggesting is not, however, a government-sponsored think tank for global commerce. The Department of Economic Statecraft should be staffed and run by those in our country with the most impressive resumes in the private sector. They should be given the tools of government to serve the business community they came from. Presidents have long recruited business leaders to join White House economic councils and working groups, and to informally offer their advice, but it’s time to go beyond that into actual executive and policy powers.

National candidate’s European vacation: Why Mitt should’ve stayed home

Ian Bremmer
Aug 7, 2012 16:18 UTC

Poor Mitt. Despite the listless U.S. economy, the aftermath of the Arab Spring and the abyss the euro zone still faces, his campaign is showing the world that it’s hard to go up against an incumbent, even one who is as potentially vulnerable as President Obama. Team Romney had to hope that the jobs report that came out on Friday would be very bad, so it could continue to pin the country’s economic malaise on Obama’s policies. Instead it got a mixed report – good hiring, but an uptick in the unemployment rate – that made it hard for Republicans to present a clear message to the American people.

Of course, what we’re seeing in this campaign is that Romney hardly needs the Department of Labor’s help when it comes to presenting mixed messages. If Romney were a smarter candidate, or had a smarter team around him, he’d absolutely hammer Obama on the economy, to the exclusion of any other issue. That’s right – no talk about healthcare, immigration, gay marriage, contraception in Catholic hospitals or Osama bin Laden. Romney’s campaign, if he wants to win, should be all economy, all the time.

Any college kid getting a poli sci degree could tell Romney that. So why on earth did his campaign just waste a week in the UK, Israel and Poland? Those three countries are American allies, to be sure, but they also don’t matter nearly as much as they used to. As such, leaving aside his constant stream of gaffes while on his tour, he didn’t get much out of his trip. Sure, Poland and the UK were happy to flatter him (to the extent that they could, given the foot he had in his mouth about the London Olympics and his shutting out of the press throughout the trip, especially in Warsaw). His stop in Warsaw may have had some impact on Polish-American swing-state voters, while Israel was important to large chunks of his American constituency, especially super PAC funder and casino magnate Sheldon Adelson.

In a G-Zero world, Syria’s civil war will drag on and on

Ian Bremmer
Jul 27, 2012 17:55 UTC

“Syria: Towards the Endgame” was the headline the Economist splashed across one of its most recent covers. But as we’ve seen with this week’s assault on Aleppo, the end of the Assad regime is, in all likelihood, not even close. Let’s unpack why and enumerate the ways:

1. China’s and Russia’s vetoes

The two countries vetoed the most recent U.N. Security Council resolution, which would have authorized sanctions against Assad’s government as a result of its repeated failures to adhere to promises to bring peace to the nation. While the result is disappointing for the Syrian people, the effect of the vetoes of China and Russia is twofold. First, the U.N. obviously has been robbed of one of the tools it uses to protect citizens of oppressive regimes. But second, the impact of the veto, coming from two countries that have up-and-down relationships with the U.S., serves to turn any American interventionism into an international incident.

Let’s be clear: This is playing politics on a global, humanitarian scale. We always knew that Russia and China would not support a U.S. intervention in Syria, not even in the way they grudgingly did when it came to Libya. But ultimately, the bloodshed there is not just on their hands. While Obama has cover for his hands-off foreign policy thanks to the veto, U.N. resolutions have hardly stopped or even influenced U.S. foreign policy in the past, especially when it mattered.

Are state-led economies better?

Ian Bremmer
Jul 3, 2012 16:16 UTC

This piece originally appeared in Reuters Magazine.

As Europe’s leaders struggle to restore confidence in the single currency and America’s economy limps ahead at a painfully slow pace, China’s economy continues to power forward at its now characteristically strong clip. For the past three decades, China has been the world’s fastest growing economy—and within the next several years, the People’s Republic will overtake the United States as the world’s largest. Some economists have even argued that, measured by purchasing-power parity, China has already pulled ahead. Such prognostications, accurate or not, have led to dire warnings that liberal capitalism’s best days are behind it, that the future lies with authoritarian market managers who are able to relocate populations and move mountains by decree. For the moment, at least, state-managed capitalism appears to be triumphant.

Such appearances, however, are misleading. The appeal of state capitalism lies in its ability to withstand the occasional crises that afflict market systems, thus shielding the general population from politically inconvenient disruptions. It is a system in which the state uses state-owned enterprises, national champion firms, sovereign wealth funds, and politically loyal banks to dominate the process of domestic wealth creation. To be sure, this is not communism; significant segments of state capitalist economies are in private hands. But the state plays the largest role in ensuring that market forces serve political ends—by ensuring that, profitable or not, businesses invest in projects that bolster social stability and protect the ruling elite’s political control.

China is not the only state capitalist economy producing impressive results. As the Arab world continues to contend with the risks of political turmoil, Saudi Arabia and the United Arab Emirates have stockpiled the cash they need to maintain stability by controlling much of the wealth produced by national oil companies. Even some emerging democracies have begun to flirt with limited forms of managed capitalism. Brazil’s private sector remains crucial for the country’s expansion, but its government leans on state-owned energy firm Petrobras and privately owned mining champion Vale to help create jobs. President Dilma Rousseff’s government won’t milk cash from these firms as President Hugo Chávez has done with state-owned oil company PDVSA in Venezuela, but Petrobras is already at risk of becoming a much larger, less efficient, and thus less profitable company.

Democracy doesn’t make miracles for Greece or Egypt

Ian Bremmer
Jun 27, 2012 15:25 UTC

For months now, the world has been waiting for the results of the momentous elections in Greece and in Egypt. In Greece, it was hoped that citizens would reject candidates who called for the breakup of the euro zone, or a Greek exit. In Egypt, the stakes were simpler, but larger: It was hoped that the election itself wouldn’t be a sham and that the country’s people would get their first true taste of the power of democracy.

It felt like everyone was holding their breath for the results in these two troubled countries, but it turns out neither country had the “disaster election” that some pundits feared. No, what both countries had was a “kick the can” election: For very different reasons, neither Greece nor Egypt is going to transform into a flourishing, liberal, fiscally sound nation overnight. And the task of governing in either country, therefore, is no big prize to either Greek Prime Minister Antonis Samaras or Egyptian President Mohammed Mursi. A lot of chips have to fall in their favor before they can even begin to get beyond the basic duties of simply showing up to work in the morning and keeping the lights on in government. But again, each country’s situation is different and bears a different explanation of the reality on the ground. Let’s take Egypt, with its internal threats to stability, first.

While the election of Mursi, the incoming Egyptian president, is a signal achievement that goes a long way toward instituting a tradition of civil rather than military rule, he alone will not get the economy to stand on its feet. The Egyptian tourism industry, its most important, has been absolutely crushed. The economy is in a shambles as the thread that was holding it together – Mubarak’s dictatorship – has been pulled from the fabric of Egypt, and the country is a long way from convincing anyone that it has recovered. While Mursi was the better choice for Egypt, he comes from the Muslim Brotherhood, basically a civic organization with no experience or expertise in macroeconomic management. The brotherhood is an important social organization: It’s a lot of things to a lot of people in Egypt, but it’s not an incubator of technocratic economic thinking or governance. That’s what the country will need to get back on its fiscal feet.

The good, the bad and the global economy

Ian Bremmer
Jun 18, 2012 12:37 UTC

Everyone knows the world’s economies are becoming ever more intertwined, but we’re only just starting to understand the ripple effects.

Welcome to the new global economy: One guy sneezes, and someone else gets a cold. That’s what we’re seeing in the slowdown now happening in the U.S., in Europe and in emerging market countries all around the world. Barring some kind of radical decoupling, the tight correlation in fates between these economic titans is a phenomenon we had better get used to, and understand, because it’s not going away. Indeed, this fact by itself – that our world is operating more and more like one big system every day – is not all bad news. However, a word of caution: Where interconnectedness yields benefits, it also creates pitfalls. Let’s look at a few examples of how this global system is actually working in our favor.

First, take the recent drop in U.S. Treasury yields. This is the more important macroeconomic story in America right now. Can any politician, with a straight face, continue to claim that getting the Simpson-Bowles recommendations passed into law was any kind of imperative for Congress or the president? The continual driving down of lending costs for the U.S. has made a mockery of credit-rating agency warnings and any perceived threat that a downgrade once held for the U.S. economy. Indeed, it takes some of the air out of the big debt-ceiling showdown that is set to take place between Democrats and Republicans in January 2013, when the $110 billion-dollar budget reduction is set to take automatic effect. It becomes increasingly hard to argue that reducing the deficit is priority number one to getting the country back on track when the cost of lending is so incredibly cheap and when the world’s investors are telling the U.S. they want more, not less of it.

Egyptian democracy’s predictable unpredictability

Ian Bremmer
Jun 6, 2012 16:55 UTC

Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time.” – Winston Churchill

In a little less than two weeks, Egyptians will choose their first new president since Hosni Mubarak took office in 1981. Before we talk about the contenders as selected by Egyptians in the first round of voting in May, let’s pause to consider how far Egypt has come in an incredibly short period of time.

Egypt has seen its thousands of years on the planet pass by without a democracy. Then, over the course of 18 days, it found itself with a revolution partly fueled by digital tools like Twitter that deposed a president (since sentenced to life in jail). Objects of the world’s attention, the protesters found themselves splashed across the pages of Time magazine, a symbol of the power of change that even oppressed citizens can have when they make the most of their moment and refuse to give up. So why the recent disappointment?

It’s Groundhog Day for saving the euro zone

Ian Bremmer
May 29, 2012 21:00 UTC

It’s almost June. So why is the euro zone story just about the same as it was in January? It’s a little like the movie Groundhog Day – every day seems to be a repeat of the last, and the story remains the same. But remember: That movie ended. And every day wasn’t the same. Bill Murray made incremental changes – painful ones – until he figured his way out. That’s what the euro zone is doing right now.

Despite all of the elections, the pain, the protests and the German Sturm und Drang, the fundamental basis of the crisis, and the situation, remains the same. Yet this isn’t as bad as it sounds. The actors in the euro zone are very much playing the long game. They’re using the markets both to punish deviations from the outcome they see as the best possible one and to engineer that outcome and help them shape the policies they think will end the crisis for good.

Despite the protests, the overall commitment to the euro zone remains as strong among all of the key players – Berlin and the peripheries – as it was before. That’s hugely important, reflecting that the overall tenor of the conversation has not shifted toward the disintegration of the euro zone, or any individual exits. Indeed, after the long, dragged-out process that’s happened in the markets these last months, the Germans are finally showing the willingness to compromise that we have long expected. They are very gradually moving toward the idea of the ECB increasing the money supply, accepting some inflation, softening the fiscal compact in the zone – moving forward on a whole host of issues, in fact. But with all that movement, they aren’t giving up on the fundamental premise of keeping the euro zone fiscally stable over the long term and recommitting every member nation to budgetary responsibility. That’s why it’s taken so long to get from there to here.

An unstable world doesn’t necessarily mean a declining America

Ian Bremmer
May 9, 2012 20:15 UTC

Who says America is in decline?

Not me. But, if you listened to a recent Rush Limbaugh show, you might’ve heard him dismiss my new book, Every Nation for Itself, as a “declinist” tract that says America’s time as leader of the world is “over.” Nothing could be further from the truth. There’s an inordinate amount of concern out there that writers who are trying to understand the seismic shifts the world has undergone in recent years are in fact doomsayers – wonks who are convinced the U.S. is no longer a superpower and has lost its swagger. On the other side of this false dichotomy is the camp that tries to pretend all the upheaval of recent years has changed absolutely nothing about America’s objective standing on the world stage.

The split is playing out right now, in fact, in the presidential campaign, with the GOP accusing President Obama of being a declinist, while Obama counters that he is merely being a realist and that the Romney camp doesn’t understand the complexities of foreign affairs in the world today. Here’s the thing – not only is that irrelevant, but the very way the debate is being framed for the public is misleading, at best.

Here’s a simple way to think of it: If you’re camping and suddenly find yourself being chased by a bear in the woods, you really don’t need to outrun the bear – you need to outrun the other guys who are in the woods with you. And so far, the U.S. is doing a fine job staying ahead of the pack.

Who’s in charge of the world? No one

Ian Bremmer
Apr 30, 2012 16:09 UTC

This is an excerpt from Every Nation for Itself: Winners and Losers in a G-Zero World, published this week by Portfolio.

Is the U.S. really in decline? Can China become a superpower? Can Europe rebuild? How fast can the rest rise? These are interesting issues, but today’s world faces a more urgent and important question: While we’re figuring all that out, who will lead? Unfortunately, the answer is no one. In this G-Zero era, no one is driving the bus.

The United States and its European allies can no longer drive the global political and economic agenda. The scramble to produce a coordinated and effective multinational response to the 2008 financial crisis made that clear, but the growing leverage of emerging states like China, India, Brazil, Russia and others was apparent years before U.S. financial institutions began melting down and the Eurozone descended into crisis.

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