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Zachary Karabell: Obama Needs a Reset Button on His Own Foreign-Policy Machine

[Zachary Karabell is an author and money manager. His most recent book is Superfusion; How China and America Became One Economy and Why the World's Prosperity Depends On It. He blogs at www.rivertwice.com.]

For the past 18 months, foreign policy has been a distinctly secondary concern for U.S. President Barack Obama, in spite of still-hot wars in Afghanistan and Iraq, nuclear diplomacy with Russia, and simmering crises in Iran and North Korea. With the U.S. economy stuck in neutral and no immediate external crisis demanding action, the sidelining of foreign policy isn't surprising. In some ways, this period resembles the mid-1990s, when domestic matters dominated the national discussion. But unlike then, the relative position of the United States is not on an upswing; instead, the United States is experiencing relative decline, which may or may not presage absolute decline in a world defined by rising affluence of emerging economies in general and China above all.

Today's challenges are also formidable and varied. Unlike during the Cold War, there is no organizing principle and no one overarching issue for U.S. foreign policy. The challenges of Afghanistan are markedly different than those of Iraq, which in turn do little to inform policy toward Iran and even less to shape approaches toward North Korea. And none of those in turn has much bearing on America's all-important economic relationship with China. The world is a series of decentralized issues, and that is not likely to change soon.

But if you just looked at the foreign-policy establishment in Washington, you wouldn't know that much has changed, either from the 1990s or even the 1950s. Yes, there are new bureaucracies and departments established in the wake of the September 11, 2001, attacks to coordinate, centralize, and enhance intelligence collection, but those are simply additions to a Cold War set of institutions created after World War II. The truth is that Obama's foreign-policy machinery doesn't look too different from Ronald Reagan's.

And it's not just the structure of foreign policy; it's the mindset as well. For the entire latter half of the 20th century, America could approach foreign policy with an unusual set of tools and a remarkable amount of leverage. Throughout the Cold War, the United States had at least four ways to pursue its foreign-policy interests: aid, trade, ideas, and guns. Each could be used as a carrot or a stick: You could use guns to invade or threaten, but you could also use arms sales to cement relationships. You could use the promise of trade and economic ties as an incentive for a recalcitrant dictator or a wavering democracy, and you could wield the potential of cutting off access to lucrative American markets and vital American capital as an effective threat. And you could use ideas -- the lure and promise of American democracy and freedom -- as a compelling alternative to communism or totalitarianism.

The shape of the American government evolved in the context of those strengths. A large Defense Department was predicated on a country that could spend a large amount of money not on one but on three separate branches and advanced weapons systems. Multiple intelligence agencies reflected the particular needs of various players in foreign policy, from the military to the State Department to the Drug Enforcement Administration to the Treasury Department. Billions of dollars in aid were granted by Congress directly and then many billions more indirectly through various programs ranging from the Peace Corps to the U.S. Agency for International Development to agricultural programs such as those that bolstered Saddam Hussein's government in the 1980s during Iraq's long war with Iran.

The Cold War was a struggle that called upon all of those resources, and at times, it was the least costly of those -- ideas -- that were the most effective. Defecting Soviet spies were often drawn not by money but by the genuine belief that American freedoms -- however flawed -- were a far cry better than Soviet constraints. As much as countries distrusted American power and questioned American intentions, they were more drawn to the promise of American life and to the appeal of American capitalism than they were to communist economics. You didn't have to like America or its government to like what it represented, and far more societies strove for what America had than aspired to be like Russia.

In the 1990s, the collapse of the Soviet Union and the confident prosperity of the United States were taken not just by Washington but by much of the world that the American way offered the best path to affluence and stability. Even the Chinese Communist Party began to woo American capital and companies to remake a moribund Chinese economy. Meanwhile, though there was a "peace dividend" in the United States and military spending was pared back, it remained massive by global standards as others pared back even more. By the end of the 1990s, with the United States flush and confident, the traditional four tools seemed more potent than ever.

The September 11 attacks saw a resurgence of foreign policy as the dominant focus of Washington, with both terrorism and two wars occupying public attention. The invasion of Afghanistan, the reorientation of the national security establishment toward nonstate actors and terrorism, and the invasion and occupation of Iraq all dominated the public agenda in Washington well through 2006. The Patriot Act, the creation of the Department of Homeland Security, and the reorganization of the intelligence community were significant and time-consuming. The 2004 presidential election was the first since the 1980s to feature foreign policy as a major component. But even as the attention of the U.S. government was more occupied with such challenges, other parts of the world began to reap the benefits of their decision to revamp their economies. Having cast their lot with market capitalism, Brazil, China, and India surged ahead, along with a host of smaller countries such as Chile and Vietnam. In Washington, however, that change barely registered.

Today, with the old world of America, Europe, and Japan economically challenged, with the general contours of market capitalism nearly universally embraced, and with foreign aid a shell of what is was, U.S. foreign policy has essentially been reduced to one tool: guns. In short, the United States is conducting its affairs abroad with a 20th-century tool kit, an antiquated mindset, and poorly allocated resources...
Read entire article at Foreign Policy