The New World Order

By April 18, 2019 Weekly TGIF

I attended a session with the Panetta Institute this week. The title was: “The Role of Nationalism, Globalism & Patriotism.” It was a fascinating topic with a stellar panel:

  • Leon Panetta – CIA Director, White House Chief of Staff and Defense Secretary
  • John Kelly – Four-Star General, Homeland Security Secretary and White House Chief of Staff
  • William McRaven – Commander of US Special Operations
  • Nicholas Burns – UN Ambassador, National Security Council and Under Secretary of State

The focus of the discussion was the New World Order and the role of the United States going forward. The New World Order is moving away from western power. It’s being led by China. Russia is trying to return to its Soviet-style strength and influence. Is the post-WWII order over? The big question: is the US still the leader of the free world? Western alliances have been fraying. The panel’s answer is yes, the United States is still the leader of the free world, but the trend of Nationalism and Populism is real. This was the foundation of the discussion.

Secretary Panetta asked what American foreign policy is today. General John Kelly responded saying it is America first, but not at the expense of others. He then paused. Kelly jokingly called his role as the Chief of Staff to a President with seemingly no discipline, “heaven on earth…” A man dedicated to serving our country for 5 decades, Kelly said he tried to do everything he could to help President Trump be successful. He went on to say that the President is not a politician nor a traditional Washington guy. There was very little process in place in the Oval Office when Kelly joined. Kelly said Trump’s focus is trade imbalances as well as unequal support to global alliances. Kelly said Trump was absolutely correct on NATO, with the US consistently living up to its financial obligations providing 4% of its GDP. Nobody else has been close. Not even close; until lately. It’s gotten better.

Ambassador Nicholas Burns was quick to point out there is no Trump Doctrine or really any clear, coherent policy in place. Burns applauds the open channels of negotiations with China, North Korea and even Russia. He believes Trump has been legitimately and accurately tough on China.

The North Korea issue is tough. Keep in mind, this session took place before it was reported that another missile test took place this week, seemingly testing the United States and the American President. There have been two summits with North Korean leader Kim Jong Un. The group saw value in trying a different approach. Nothing else was working for two decades. And Trump has effectively given up nothing. At least for now. They all believe a third summit would be a mistake. Signs are showing sanctions are being ignored. China and Russia are believed to be trading with North Korea again. It’s also being rumored that Russia is engaging North Korea in its own summit. This could complicate things further. The US would be wise to scale talks down and have junior delegates work to get something done without elevating Kim to the global stage again with the American President.

The panel shared concerns about Russia meddling in our democracy, particularly at a time when there is a vacancy at the Defense Department after General Mattis departed. China, Iran and North Korea are high on their list of concerns too. The State Department is thinly staffed, having lost 60% of career ambassadors. An additional 20% cut is coming with this year’s budget. They all agree that the US is strongest with coordinated and complementary leadership between military and diplomacy. We need a deeper bench.

Vladimir Putin is now 20 years in power. They consider him brilliant, resourceful and determined. He’s also considered ruthless and a menace to the US. Remember, Putin believes the fall of the Soviet Union to be the greatest tragedy of the 20th century. He has worked tirelessly to bring back the power. Knowing he can’t win a traditional war, he chose different methods. Lacking the economic resources, Putin has focused on destabilizing the West through cyber tactics. He has also preyed on the West’s war fatigue, having annexed Crimea with no real consequence. The greatest success, however, has come through manipulation on social media and the web. The 2020 election is a major target. Putin absolutely revels at the level of divisiveness throughout America and Europe. Even he must be a little surprised in how effective it’s been. Many Americans hate other Americans these days. Polls have shown that both Republicans and Democrats have a more favorable view of Vladimir Putin than the opposing party leader. Think about that for a minute.

Government works slow for a reason. It was by design. These great Americans have worked with many Presidents. They said every one of them was frustrated that they lacked the power they thought they had when entering office. Checks and balances work. Kelly laughingly said, “those guys that wrote the Constitution were really smart!”

When asked whether they were optimistic or pessimistic about the prospects for America 5 years from now, the panel was unanimously optimistic. Admiral McRaven, who designed the plan to capture Bin Laden, called the millennials a fabulous group. He has seen them fighting ISIS and the Taliban overseas as well as wildfires in California. They ask questions. They push back. They take care of one another. He has been thoroughly impressed with how the students at Parkland in Florida have seized the moment because leaders have failed. This was a movement with legs. He sees a bright future for this next generation.

General Kelly concurred. “Our strength is who we are,” he said. Kelly considers the current divided environment a temporary phase. The problem as he sees it, is the fact that we are not listening to each other. Instead, we’re yelling at each other. Most Americans want to live their lives. They want good jobs and to be compensated for hard work. They want to take care of their families.

A critical issue for the future is global alliance. NATO is yesterday’s story, but tomorrow’s too. The US will need to find a way to work with China without being manipulated. Trust, but verify, is a sound approach. Demographics are playing a role. Emerging Market economies are young while established economies are getting older. The US is the second youngest large global economy, behind India. Europe, Japan, China, and Russia have older demographics. Importantly, India shares the same concerns and issues about China that we do. This makes for a strategic, natural alliance.

The world is more connected than ever. Today, what happens in a mud hut in Yemen absolutely impacts a farm in Iowa. This connectivity will not reverse. We need to increase the number of allies we can count on and who can count on us. Our allies rushed to our aid after September 11 because we were there for them in the 1940’s and stayed by them for decades when they were threatened. They were reminded of a very simple but eloquent quote from Former Secretary of State Condoleezza Rice in the wake of September 11th. “It’s good to have friends in the world.”

Indeed it is.

Have a nice weekend. The Market will be closed tomorrow in observance of Good Friday. Our office will be too. We’ll be back, dark and early on Monday.

Mike

The BFIC Reusable Bag

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Don’t worry, the BFIC Traveling Hat will be on its next adventure next week. Where will it go next?