Johns Hopkins professor Francis Fukuyama writing in the 13 October 2008 issue of Newsweek, The Fall of America, Inc., offers one analysis and explanation for what has happened to America’s economy. His basic idea is that Reaganomics have run their course. Reaganism favored deregulation of the economy, less government and lowering taxes as the basis for all good things. Fukuyama suggests all good things come to an end. Reaganism which started with such promise worked in its early years, but as it became guided by ideologues it lost the ability to adapt to the changing conditions of the world, and in the end it bankrupted the very economic explosion it had created by collapsing in on itself.
Fukuyama worries that the greatest damage though is not the economic loss which is severe, but the loss of American prestige in the eyes of the world. The nations of the world are watching how following American “cowboy capitalism” has led to worldwide financial disaster. America created a world economic system that was not sustainable, and now the world will have to suffer for this. He points out that Russia, China, Venezuela and other nations are eager to step into the void created by the collapse of Reagan ideology. The Reagan mantra that government is the problem has led to the government having to do the largest financial bailout in history to deal with a mess partially created by the failure of the government to regulate. And to the surprise of the Reaganomic cheerleaders, deficit does matter – an ever expanding deficit is no more sustainable for the government than it is for families. Fukuyama doesn’t spare the Democrats either for he blames them for failing to come up with candidates or a plan to address the problem which was becoming increasing obvious to many.
He also says that America’s other great idea and export – democracy – got hijacked by the current administration’s war on terrorism, and today when America says they are promoting “democracy” the world hears this as American hegemony. As the world sees it the Bush administration used “democracy” as “a code word for military intervention and regime change.”
Personally in the next Obama-McCain debate, I would like to see NEWSWEEKS’ Fukuyama and Fareed Zakaria formulate the tough questions for the candidates to answer. I would like to see some foreign policy questions that center on world economics, not just commander in chief issues. The president of the U.S. still claims to be the leader of the free world, and that is an aspect of the presidency that seems to get ignored as foreign policy questions get shrouded in military overtones. Even Defense Secretary Robert Gates has criticized “the creeping militarization” of U.S. foreign policy. The president has to see and approach the world not simply as the Commander in Chief of the American Army, but also as the leader of the free world. When American foreign policy focuses exclusively on its military (the one part of American foreign policy that seems to have no financial limits), is it any wonder that other nations – even our allies – feel threatened by US?
If Fukuyama is correct, the next president is going to have a lot of work in improving the image of the U.S. to the world, and this is not going to be accomplished by increased militarization, but by better foreign policy.