Financial default aside, another kind of default has already taken place

Last night I attended a dinner of old Washington hands. Some had served in high government offices, some were lobbyists, some were think tankers, some were still running for office, others were active in campaigns of one sort or another.  These were seasoned players who had seen it all … and there was fear and outrage in their eyes.

They felt the leaders of both parties had lost any sense of accountability. They were appalled by the degree to which, at a moment of national crisis, twisted notions of ideological purity and cynical politics had obliterated any focus on solving the problems at hand, on public service. Whether or not the country averts fiscal default, that we had come to this point was a sign to all that a leadership default had already taken place.

This was a bipartisan group and their disgust was equally distributed among Democrats and Republicans -- although it must be said that, in spite of that, there was a sense that in recent days President Obama and Speaker Boehner had both shown a healthy willingness to seek compromise and to resist the extremists in their parties.

We had a lively discussion around a small square table, and the political scientists among us provided data that underscored the unprecedented nature of the partisan divide in America today, while others offered polling results that hinted at the appetite of the American people for more political choices than are available today.

But nothing captured the sense of this room and the moment in which we are living than a comment made by the youngest participant in the room. He was a former Marine officer who had done five tours of duty. He told a story of how, not too long ago, at a firebase near the Pakistani border in Afghanistan, troops started seeing email traffic about what might happen if the government ran out of money. The advice they were receiving was that it was possible they would not be paid and that while government employees back home might not go to work, they would be left to their own devices -- there, on the edge of nowhere, at risk for their lives.

That's what playing chicken with the debt ceiling does. It sends a message to troops who are putting their lives on the line every day for their country that politicians in Washington wouldn't risk political discomfort to preserve the full faith and credit of the U.S. government.

Of course, it does more than that. In a world in which most major economies are currently at risk it takes one of the most dangerous economic situations the planet has ever seen and it makes it much worse.  Somehow the Eric Cantors of this world have lost all sense of context or consequences or their most basic responsibilities. They act as though they think the final metrics for their experiments in dereliction of duty will be a vote count rather than lost jobs and shattered fortunes.

The world economy is a house of cards right now. That's not an exaggeration. A crisis in Italy or Spain or the U.S. or China or Brazil or Japan could be enough to tip the others toward recession or worse, to drive global interest rates upward, to dry up pools of capital, to crush markets. And with long-term, structural solutions proving elusive everywhere, it is likely we are entering a period of prolonged fragility, heightened risk, and protracted suffering.

This is all so large. And the men and women who have let political expediency and personal ambition get in the way of genuine solutions are, with each day, proving themselves smaller and smaller.  It's precisely the kind of situation that one can only hope will trigger much more fundamental changes -- and not just economic ones either. If this kind of irresponsibility is the best the two political parties we have can do, then perhaps it is time they get some competition.


David Rothkopf

Acknowledging the tectonic shift in U.S.-Brazil relations

For years the hackneyed joke about Brazil was that it was the country of tomorrow and always would be. But almost a decade ago, in the wake of the reforms of the Cardoso administration, and then thanks to the remarkable presidential tenure of Luiz Inacio "Lula" Da Silva and the industry and enterprise of the Brazilian people, the joke was overtaken by events. As investors, CEOs, journalists and most of the world's leading powers have recognized, Brazil has arrived.

While U.S. leaders like Presidents George Bush and Barack Obama have acknowledged the change, many in the U.S. policy community remained holdouts or skeptics. Yes, Brazil was on the rise they said, but they always found a way to qualify their views, to establish one criteria or another that Brazil would have to meet before it was finally seen as a "first-class power." While Asia specialists embraced the rise of China and India and quickly began to remake policy based on changing power relationships, Latin specialists clung to the past, to old formulations and prejudices.

In the eyes of these living museum pieces of Washington's small, inbred Latin American affairs community, Brazil might be the country of tomorrow, it might even be the country of later on today, but we would be sticking with the policies of yesterday until further notice.

Today, the Council on Foreign Relations (CFR) has issued a new task force report on U.S.-Brazil relations that goes a long way toward breaking with the past by recommending the U.S. move toward a new policy stance with regard to Brazil.  The central point of the report is that Brazil must be liberated from the Latin policy barrio and viewed as one of the most important global powers of today and of the century ahead. 

The report, entitled, "Global Brazil and U.S.-Brazil Relations", is the result of more than a year of work by a task force co-chaired by former U.S. Energy Secretary Samuel Bodman and former World Bank President James Wolfensohn and directed by CFR Senior Fellow and Director for Latin America Studies Julia Sweig. I was a member of the task force and the discussions surrounding the development of the reports recommendations were a fascinating microcosm of the all the debates, enthusiasms and frustrations that have marked conversations about U.S.-Brazil relations in recent years.

While it should hardly be seen as revolutionary that a country that is the fifth most populous in the world, encompasses the fifth-largest land mass of any nation, and, at expected rates of growth, will within a few years be home to the fifth-largest economy in the world should be seen not just as a leading regional power but as a vitally important global player, historical habits and old policy frameworks are hard to undo. Yet, this report effectively does so, enumerating the ways that Brazil has come to play a central global role on issues from trade to climate, from energy to shaping global economic policy. 

Yet for all its comprehensiveness and sweep, the one recommendation of the report that is sure to gain the most attention is its welcome recommendation that the Obama administration "now fully endorse" Brazil as a permanent member of the U.N. Security Council. While this step, which goes beyond the formulations of support offered by President Obama on his recent Brazil trip, may be seen as largely symbolic given that such a change in the structure of the Security Council is likely to be years off, it is likely to be deeply resonant in Brazil. The report's rationale explains why, as it notes that "a formal endorsement from the United States for Brazil would go far to overcome lingering suspicion within the Brazilian government that the U.S. commitment to a mature relationship between equals is largely rhetorical."

That's no small thing.  Because U.S. treatment of Brazil -- even during an Obama administration that seems sincerely committed to deepening the relationship -- has stubbornly reflected old notions about what the international role of Brazil should be.  Nowhere was this clearer than reactions to Brazil's initiative with Turkey to help broker a deal to avoid an international confrontation over Iran's nuclear program.  Because Brazil strayed from the U.S. script and acted independently -- even though it had received the explicit endorsement of the White House to go ahead with its plan -- the United States was frustrated and offended by Brazil's action. (Whether or not the actions of Brazil and Turkey were effective or deftly handled is a separate issue that I have addressed in the past. In brief: They weren't. But if making policy errors disqualified countries from developing strong international relationships, the United States and virtually every other country in the world would be isolated and alone.)

Because the United States has never really gotten over the idea that Brazil should take a back seat to U.S. policies, however, it didn't treat the difference over this issue like it does its myriad differences with, say, other BRICs like China, Russia, or India. Rather, it has continuously sought to penalize the Brazilians for their independence, most notably through withholding a full endorsement of Brazil's Security Council aspirations, of the type the United States had already offered to India. This despite the fact that the United States has had many equivalent or greater policy disagreements with the Indians, including one, for example, over India's own nuclear weapons program.

This kind of double standard, one for the emerging powers of Asia (think of the differences and conflicts with China that are regularly overlooked) and one for the emerging power of the Americas, is the source of Brazil's skepticism to date about U.S. sincerity in welcoming its rise. Another source of the resistance to support for recognizing the legitimate claim of Brazil to be acknowledged as one of the handful of most important powers in the world comes from the old Latin policy hands who would argue, as hinted at in a dissent to the task force report, that the United States needed to go to slow with Brazil lest it offend other aspirant regional powers like Mexico or even Chile. Yet there is clearly no reason why these countries could possibly think they should be accorded similar status to Brazil beyond their healthy national pride. Do you think that there was a big debate among Asia-Pacific policy hands about how Indonesia (more populous than Mexico) or Australia (larger economy than Mexico) would feel about supporting India?  Of course, not.  Because powers in Asia are already automatically viewed by U.S. policy specialists as more sophisticated global players than most of those in Latin America.

This report, whose signatories include former Undersecretary of State Nick Burns, former Clinton Latin policy official Nelson Cunningham, former U.S. Ambassador to Brazil Donna Hrinak, and former National Intelligence Council Chair Robert Hutchings, represents the latest rumbling in a tectonic shift with regard to how the United States views the role of emerging powers.  As such, it is a big step forward and it was a privilege to be associated with the effort.