Kuttner: "If Bush wins in 2004, a radicalized right
wing will have wall-to-wall control of government. It
is hard to think of another American election—perhaps
1860—where the consequences were more momentous and
the outcome more dependent on luck and timing."
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Beat The Clock
Robert Kuttner is founder and co-editor of The
American Prospect.
For both parties, next year's presidential election
is, in many ways, a race against the clock. For
President Bush, the question is whether he peaks too
early. For now, the economic news is good and the war
news just barely tolerable.
But take a closer look at both fronts. On the economy,
the ideal time for Bush's reelection would be about
now, when everything is on an upswing. Unfortunately,
the election is next fall. Economic growth and the
beginning of job growth have returned. However, both
are built on a unsustainable degree of economic
stimulus. The federal budget deficit is about 5
percent of GDP, and rising. Interest rates are at
five-decade lows.
Will Bush—and the economy—muddle through until
November 2004? His election could well depend on it.
With that amount of stimulus, of course the economy
grows. Even so, jobs are not yet growing fast enough
to reduce unemployment much, and wages are still
fairly flat. The problem is that you can't sustain
very high deficits and very low interest rates very
long. Money markets look at the rising national debt,
and start getting very nervous. That pushes up
interest rates.
More ominously, huge budget deficits are linked to
huge trade deficits. We finance our deficits and
borrowing binge by absorbing capital from the rest of
the world. That's not sustainable either.
At some point, our overseas creditors start getting
nervous, too. The euro is now close to an all-time
high against the dollar. If all those foreigners
buying dollars and dollar-denominated investments
start pulling back, the dollar goes into free fall.
Trading partners like Japan and China, who depend on
exports, have been buying huge quantities of dollars,
to keep their own currencies from rising and the
dollar from crashing. This game can't go on
indefinitely. A senior international banker, who
channels billions of dollars of capital to Asia, told
me he puts the odds of a dollar crash at about 40
percent. Will Bush—and the economy—muddle through
until November 2004? His election could well depend on
it.
But the economy looks positively rosy compared with
the foreign policy front. The president has served
American troops a turkey, in more ways than one.
Ever since last month's emergency meeting with
proconsul Paul Bremer, it's clear that the
administration is belatedly looking for an exit
strategy. Bush wants most troops home for the
election. However, no serious observer of Iraq thinks
that nation's political situation can be stabilized
that quickly. An international peacekeeping force for
Iraq under United Nations auspices is off the table
because Bush refuses to share authority.
Iraq could easily be more of an international menace
in 2004 than in 2002.
If power is turned over to the Iraqis in 2004, the
likely result will be escalating violence, a serious
risk of partition into three countries—Shiite, Sunni
and Kurd—and civil war. Iraq could easily be more of
an international menace—and a U.S. foreign policy
failure—in 2004 than in 2002.
Of course, Bush and his political handlers are cynical
enough to arrange a power transfer late in 2004, so
that the newscasts will be filled with happy troops
returning home all fall, and hope to delay the
collapse until the election is over. But events have a
way of mocking such split-second timing.
Over in the opposition camp, the Democrats have a very
different timing problem. For 20 years, they have been
tinkering with the nomination process in the hope of
getting it done early, so that their standard bearer
can be known early and the usual extended brawl
avoided.
This year, however, the nomination process could drag
on, leaving Democrats pounding on each other rather
than honing their challenge to Bush. One of the
Democrats' rule changes requires delegates to be
awarded proportionally. No more winning New York by a
few votes and being awarded all of its delegates.
Every state will now have a split delegation. This
change, coupled with a large field of candidates,
makes it much harder for any candidate to win half the
delegates, and the nomination contest could go all the
way to the convention for the first time since 1960.
Of course, the cliffhanger outcome that year did not
prevent John Kennedy from going on to win the
presidency. But primaries have become more protracted
and nastier in four decades and extended in-fighting
can hardly be good for the opposition.
The Democrats' nomination contest could go all the way
to the convention for the first time since 1960.
If Bush wins in 2004, a radicalized right wing will
have wall-to-wall control of government. It is hard to
think of another American election—perhaps 1860—where
the consequences were more momentous and the outcome
more dependent on luck and timing.
Editor's Note: This article originally appeared in the
Boston Globe Dec. 3, 2003.