|New American Strategies
for Security and Peace
Samuel R. Berger, Ivo Daalder, Clyde Prestowitz, Susan
Rice, Robert Rubin
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SB = Samuel R. Berger
ID = Ivo Daalder
= Clyde Prestowitz
SR = Susan Rice
RR = Robert Rubin
Samuel Berger is currently the Chairman of Stonebridge
International, a strategy firm that serves business
and clients around the world. He’s had a long
and distinguished career of public service most recently
as National Security Advisor to President Clinton, and
he will introduce the other panels and take it from
SB: Thank you very much Dick. Thanks
Dick and to Bob Kuttner, to Dick Leone, and John Podesta.
Congratulations for assembling really quite an extraordinary
group of individuals for the next two days. This first
panel is, “Is America Safer? The Bush Doctrine
and National Security.” I’ll say a few words
about that in a minute, but let me introduce my co-panelists.
At my right is one of the many Brookings contingent
here. Ivo Daalder is a senior fellow in international
security at Brookings. From 1995 to 1996 he served as
Director for European Affairs on the NSC and has just
completed a book that I think is going to be important
for all of us, a co-author, called “America Unbound,
the Bush Revolution in Foreign Policy”. Ivo is
a prodigious and thoughtful writer as we all know.
To my immediate right is Clyde Prestowitz. Clyde is
the founder and President of the Economic Strategy Institute
which over almost two decades now has had a substantial
impact on economic policy thinking in Washington. He
is the author of something which could only be described
as an oxymoron -- a best selling foreign policy book
called “Rogue Nation”. Can I hold your book
like Oprah? “Rogue Nation.” There it is.
Available in your bookstores. “American Unilateralism
and the Failure of Good Intentions”.
I first met Clyde when he served as a senior official
in the Commerce Department in the Reagan Administration.
To my left, that’s inaptly, is Susan Rice. Also
a senior fellow in foreign policy at Brookings. I diverted
Susan from a meteoric career in McKenzie Company in
1992 to come help us in the Clinton transition from
which she proceeded to become Senior Director of the
National Security Council, Assistant Secretary of State
for Africa and serve with great distinction in all those
On my far left, Bob Rubin. Bob helps run a bank in
New York. He was a simple trader in the bond market
and stock market and somehow rose from that humble beginning
to be co-chair of Goldman Sachs for a substantial period
of time. Let’s be a little imprecise about the
dates here. In 1993 —
BR: I could have stayed in New York
and been ridiculed.
SB: I don’t get this opportunity
often, Bob, in front of large crowds. From 1993 both
as the first national economic advisor to the President
and then later with President Clinton and Larry Summers
and the team he built. It is Bob Rubin who accumulated
the six trillion dollar surplus that this administration
has squandered. (Applause)
You didn’t let me get to the good one. Let me
say a bit about the topic, the Bush Doctrine of National
Security. What is the Bush Doctrine? Its many different
formulations. It may not be a many splendored thing,
but it is a many layered thing. I think it is useful
at the outset to disaggregate it before we try to deal
It is a radical shift in the nature of American foreign
policy as Ted Sorensen and General Clark have made clear.
Now certainly it has been shaped by perhaps the most
stunning external reality of our time and that is the
attack on us on 9-11. At that moment America lost the
sense of invulnerability that we had felt for most of
our history. We were blessed by being a bountiful continental
nation. Oceans on both sides.
Relatively friendly neighbors. Suddenly on 9-11 we knew
that even Manhattan was not an island. So that is a
fundamental change which would have taken place which
had to be dealt with no matter who was President. It
represents it seems to me the first layer of the Bush
Doctrine and that is that from that point on the central
strategic priority of American foreign policy is the
war on terrorism.
I think that would have been true had there been a
President Gore or some other President. The second element
really derives from the first. That is I think equally
justifiable. As President Bush has said, our highest
priority is to keep the most deadly weapons out of the
hands of the most dangerous regimes and the most dangerous
people, to focus on proliferation.
The advent of a new stateless terrorism with global
reach changed the classic deterrence model that had
applied over 200 years in a state context. Whether or
not we can deter a North Korea from using nuclear weapons
on the south, it’s hard to deter suicidal terrorists.
I would say so far so good.
Then the President both in principle and practice
extended his doctrine in several ways that I think have
been both controversial and wrong-headed. First, he
extended the war on terrorism to include an axis of
evil nations— Iraq, North Korea and Iran —
who could supply weapons of mass destruction to terror
groups. That with respect to such countries he declared
that we must be prepared to strike first even before
the threat is imminent.
Based upon their ostensible capabilities -- ostensible
is a more meaningful word today and propensities --
because uncertainty became a reason for action not a
reason for prudence. He said that what we didn’t
know could hurt us. In a sense he fundamentally rejected
the doctrine of deterrence which had been the cornerstone
of national security for the last fifty years.
This poor Bush Doctrine says that we will seek to
prevent — essentially it says — we will
seek to prevent a second 9-11 not only by aggressively
pursuing individual terrorists and by issuing ultimatum
to state sponsors of terrorism that they give up weapons
of mass destruction programs or face the possibility
of U.S.-sponsored regimes.
Now on this last point the Democlean sword of the
axis of evil we are beginning to see some softening
from Bush administration as they come across the realities
of the world and as they belatedly, perhaps too belatedly
(to make up a word), come to recognize that ultimatum
with North Korea unlikely to produce anything other
There are also I think some corollaries I think to
the core Bush Doctrine which are equally important to
recognize. Coalitions I think in their view are more
useful instruments with which to deal with the world
than alliances. We’ve heard Don Rumsfeld say that
the purpose drives the coalition. The coalition doesn’t
drive the purpose. That’s fundamentally antithetical
to the notion of enduring alliances which help set common
threat perceptions and which require continuing tending.
A second corollary I think to the Bush Doctrine has
been that international support generally is useful
but basically will fall behind us if we exercise our
power. Something we have discovered to be not true.
The third corollary I believe of the Bush Doctrine is
that military power is the dominant instrument of advancing
our national interests in the world. And related to
that that the exercise of non-military forms of power,
so-called soft power, diplomacy, persuasion, leadership
across the broad range of common concerns of mankind,
is peripheral, not central.
Perhaps related to Presidential travel but not to
fundamental national interest. Now I’ve stated
the Bush Doctrine in what I consider its purist form.
As I noted, in some cases reality has begun to crackle
at the edges, and the panelists undoubtedly will amplify.
But let me simply say that the mess that we are in today
in Iraq in my judgment is not simply to product of bad
decisions. But it is the inexorable consequence of this
accumulated set of ideological principles that I just
This set of presumptions that have been proven almost
completely wrong. Let’s be clear, notwithstanding
the number of schools that we have built or hospitals
that we have painted, what we’re involved in today
in Iraq is a classic guerilla war, and in a classic
guerilla war most of the country often does look fine
because the guerillas choose the time and place of the
So I am not much comforted by the number of pagodas
that we have built in Iraq last week. The fact of the
matter is we’re engaged in a classic guerilla
war. One might call it the Iraq War II, Chapter Two.
The sooner that we end the denial and delusion that
we’re operating under with respect to this reality
Now the purpose of this panel and this conference
is not only to critique but it is to look forward and
to try to answer and address at least some of the difficult
questions we face going forward. I hope our panelists
will do that. Our next panel that Dick Holbrook will
chair will talk more specifically about winning the
peace in Iraq and Afghanistan.
But let me lay out a few of the questions that I think
the critiques of the Bush Doctrine must answer if not
today than going forward. If the doctrine of preemption
is not wrong, is not a unsuitable counter-proliferation
strategy in and of itself what is the alternative for
dealing with states that are intent upon going nuclear
beyond the past policy of export controls, job owning,
diplomacy, unilateral sanctions and a flawed an inadequate
I think we have to develop our answer to that question.
If we make — if we’re serious about —
if we make a serious offer to Kim Jong Il in North Korea,
question number two, and he refuses that, is he is determined
to develop a nuclear factory in North Korea, what are
our alternatives? Three. How important is it for America
to be admired as well as respected in the world today
and what will that involve.
Four. How do we lead so that others will follow—others
will follow us to advance our interests? Finally, how
do we meet the increased demands on our resources abroad
within our overall resources as a nation? What are the
choices we need to make? I hope that these and other
questions will be stimulated by the panel and by your
questions that come thereafter.
Let me turn over first to Ivo Daalder.
IV: Thank you Sandy. Thank you all for coming, for
the invitation to speak to you. I’m gonna talk
about the issue of preemption in the five or so minutes
allotted to me and the question of how in the world
we live in one can forge a framework for making the
possible use, preemptive use, of military force more
legitimate than the current administration has succeeded.
As Sandy said at the outset, we now live in a world
in which terrorists and tyrants my join forces to develop
and use technologies of mass destruction to inflict
grievous harm against the United States, it’s
friends and its allies and interests anywhere around
the globe. And more worrisome they can do so in little
more than a moment’s notice.
9-11 raised the pressing question of how we should
respond to this kind of threat, and the Bush Administration’s
answer has been the doctrine of preemption. Given the
havoc that a terrorist attack with nuclear or other
weapons of mass destruction would surely inflict preempting
such an attack is unquestionably desirable, and the
United States like many other countries has left open
the possibility of using our military forces preemptively
in the past.
What is different in this administration is that it
has gone further by turning a useful tool of last resort
into a guiding doctrine of American foreign policy.
It is a radical departure of past practice. Remember
that in the years past other presidents have faced the
possibility and the question of whether or not to launch
a war against a country that was acquiring nuclear weapons.
We had the Soviet Union in the late 1940’s, Cuba
in 1962 or against China in 1964. At each instance presidents
confronted with that choice decided not to engage in
preemptive or in this case preventive war.
In 2003 George W. Bush chose very differently, and
he did so on the basis of evidence that was far more
flimsy than existed in these earlier cases. The preemption
doctrine that the administration has enunciated over
a year ago suffers from serious flaws. Most importantly
it is probably self-defeating. Once you put a country
on notice that Washington will preempt their acquisition
of nuclear or other weapons of mass destruction, that
country will have every incentive to speed up the development
and acquisition of precisely those capabilities.
That of course is surely one reason why countries
like North Korea and Iran have in recent years accelerated
their nuclear program. Once you make people part of
an axis of evil they are likely to behave in exactly
the way that we predict, but do so before we can do
anything about it. More importantly, or equally importantly,
if taken seriously by others the doctrine of preemption
will exacerbate the security dilemma that exists among
hostile states by raising among them the incentive to
initiative military force before others do.
The result is to undermine whatever stability may
exist in a military standoff between adversaries. Take
the very real case of India and Pakistan. Both nuclear
powers with longstanding territorial and other grievances.
Suppose tensions were to rise as indeed in the past
they have done with some frequency. Islamabad fearing
that New Delhi might try to preempt its quite vulnerable
nuclear capabilities will have a powerful incentive
to strike first. India, knowing this to be the case,
will have an equally powerful incentive to strike before
Given this dynamic the use of force, the use of deadly
nuclear force, could in fact become an issue of first
resort rather than last resort undermining whatever
time and ability might one have—one might have
to influence the course of events diplomatically.
The case of India and Pakistan point to another grave
danger of publicly promulgating a doctrine of preemption
which is that other states are likely to embrace it
too as Russia has done with regard to Georgia and indeed
as India did on the very day that the national security
strategy promulgated the doctrine was published when
it said if the United States has the right for preemption
than surely so do we.
But as Henry Kissinger has argued, and I quote, “it
cannot be either in the American national interest or
the world’s interest to develop principles that
grant every nation an unfettered right of preemption
against its own definition of threats to its security”.
Yet for all the flaws that this doctrine has there is
no doubt that the need for preemptive military force
has increased in recent years, not decreased.
Just consider that the last three wars this country,
the United States, has engaged in were fought for reasons
triggered by developments internal to states. In Kosovo
it was a gross violation of human rights. In Afghanistan
it was the harboring of terrorists. And in Iraq it was
the development of weapons of mass destruction. Yet
our international norms, the rules that have governed
the use of force for well over a half century are all
based on regulating the external behavior of states
not their internal behavior.
Article 51 of the U.N. Charter enshrines the right
of collective self-defense and individual self-defense
while other uses of force are dealt with—are justified
only when there are threats to or breaches of international
peace and security. All of these are based on the concept
of inter not intra state conflict.
So the challenge before us of the international community
right now and for the United States as one of its leading
members is to forge a new consensus on the use of force
that deals with the threats and challenges stemming
from behavior internal to the states. How in such instances
we have to ask is the use of force to be legitimized.
Relying on the U.N. Security Council for approval is
quite unsatisfactory as the different cases of Kosovo
and Iraq have demonstrated.
Dick Cheney surely isn’t the only one to wonder
why international legitimacy for using force requires
the ascent of such disparate countries as China, Russia,
Britain and France. Yet at the same time a unilateral
decision to launch a war against another country, even
if in the name of enforcing the will of the international
community, is equally unsatisfactory as the case of
So a different basis of legitimacy, one that is neither
unilateral nor necessarily U.N.-based will have to be
developed. Finding this new basis will take intensive
effort and much discussion. First with our allies in
Europe and elsewhere and ultimately with major nations
across the globe. An international discussion must be
started with great urgency.
Kofi Annan (ph.) has appointed an international panel
of experts to examine this question already. But Washington
should commence and we all should commence a discussion
of our own aimed at finding answers to such important
questions as under what circumstances is the use of
preemptive force to be justified? Who must be involved
in determining the existence of these circumstances?
Who should decide that the use of force in these instances
is in fact justified? And who must participate not only
in the decision but in its implementation?
An international dialog at finding appropriate answers
underscores that the question of preemption is not primarily
one of now or never but more of when, how and by whom.
SB: Thank you Ivo. Clyde.
CP: Sandy, thank you very much. Thank
you very much. My theme in “Rogue Nation”
and in the speeches I’ve been making around the
country and around the world is essentially that the
United States is not in fact a rogue nation. It’s
well intended. But that unilateralism is undermining
the power and effect of our good intentions. In fact,
actually the guy who made my argument best was candidate
George W. Bush.
You may remember in — I forget which debate
it was but one of the debates — he made this very
interesting statement. “If we are a humble nation
they will respect us. If we are arrogant they will react
against us”. Absolutely right. Powerful as we
are as a country in an age of globalization, in an age
of interdependence driven by technologically-driven
shrinkage of time and distance, we cannot achieve our
own objectives, we cannot maximize our own security,
and we cannot maximize our own economic growth and welfare
without friends, without allies, without people who
are willing to cooperate with us.
The cost of unilateralism is enormous not just in
terms of international security, not just in terms of
lives, but also in terms of economic growth, in terms
of treasure, in terms of the soft power that has been
the hallmark of American influence in the world. I was
struck last week when President Bush made his tour of
Asia going out to the APEC leaders meeting in Bangkok
and then on to Australia. What struck me was the contrast
between the President’s trip and that of President
of China, Hugen Tao.
You remember that at the beginning of this administration
a comment was made that China is not a strategic partner
of the United States. It’s a strategic competitor.
Now actually one of the silver linings of 9-11 has been
that that attitude seems to have changed at least for
the moment. But what struck me about last week was the
extent to which China has assumed the American role.
Bush went out and stopped for two hours in each of
the capitals along the way, isolated from the public.
Talked narrowly about security, about terrorism, pushed
an American agenda focused on the war on terror. Hugen
Tao went out and talked about we want to invest in you.
Let’s do free trade. In fact I was really struck
by the fact that APEC was an American creation, the
idea of which was to create a Pacific Economic Community
with the United States in.
What seems to be happening is that China is negotiating
free trade arrangements with the Asian countries, with
others in Asia, offering investment, offering its market
and creating essentially a Pacific Economic Community
with the United States out. Australia I thought was
very telling. The President has to be distanced from
hecklers in the Australian Parliament and stopped only
in Canberra and then quickly got out.
Hugen Tao made the grand tour warmly received. So
this juxtaposition shows the hard to quantify but very
real costs of American unilateralism just from an economic
point of view. If we go beyond that the irony it seems
to me is that while unilateralism is based on the notion
of shock and awe and that we will through our great
power impose a system of democracy and freedom and open
markets, the irony is that the exercise of this shock
and awe actually shows the limits of this power.
Does the world think the United States is more powerful
today than it thought we were a year ago or two years
ago? No. It’s clear now that the limits of American
military power are much stricter than we thought they
are. It’s clearer now that the ability of the
United States to rally the international community to
pull in behind it support for its economic objectives
and for its political objectives is less than was thought
a year or two ago.
So the great irony is that if you ask yourself this
question are we safer today than we were two years ago
the answer has to be no. Thank you.
SR: Thank you Sandy. Part of the
reason we’re less safe, as Clyde said, is that
we are leading in a poor and selfish way. We’re
failing to respect the legitimate interests of others.
In the short time I have I’d like to touch on
three points. First of all very briefly, how did we
get here? Secondly, where do we go? Thirdly, to focus
on a specific aspect of the need to change, which is
to deal more effectively with the problem imposed by
How did we get here? Well, we all know that this administration
acts as if we are the only country in the world with
national interests. We’ve managed to aggravate,
even alienate, large swaths of the globe by our arrogance,
our unilateralism and our lack of interest in those
things that concern them. We’ve rejected treaties.
We’ve undermined institutions. We’ve broken
lots of crockery on Iraq.
But I think very fundamentally we’ve ignored
the concerns of the vast majority of people on this
planet whether poverty, disease, conflict or lack of
democracy and respect for human rights. We’ve
also followed a consistent pattern of raising expectations
and making promises but leaving them unfulfilled whether
we’re talking about immigration reform for Mexico,
peace keepers for Liberia or full funding for HIV/AIDS.
So we’ve come across as a self-interested hegemony
rather than a global leader for the common good. This
obviously undermines our moral leadership and weakens
our ability to gain support for our legitimate objectives.
So how do we change this? Where do we go? Well, first
of all a very simple but radical notion. That perhaps
we ought to care what other people and what other nations
Perhaps we ought to listen and consult and even once
in a while heed their advice. Perhaps we ought to try
to fix rather than blow up problematic treaties or institutions
and lead with enlightened self-interest recognizing
that we win when others win and we lose when others
lose. Our security is ultimately threatened when half
the world’s population lives on less than two
dollars a day.
So out of self-interest if nothing else we ought to
view it as our fight, not just the developing world’s,
to close the gaps between rich and poor. It should be
our fight to educate the uneducated, help educate and
train and employ jobless youth, prevent and treat infectious
diseases, open our markets fully to goods and services
from the developing world, end agricultural subsidies,
deal seriously with conflict and help to rehabilitate
If we don’t take seriously the threats that
other people face they’re not going to want to
join with us when our vital interests are at stake.
So let me just focus on one aspect of what I mean by
enlightened self-interest. We need to be serious about
the challenge of rehabilitating failed states. Failed
states pose a significant threat to our own security,
not just to the people who live in them.
Now by failed states I mean countries where the central
government doesn’t exercise effective control
over parts of its territory or is able to deliver vital
services to parts of its territory perhaps due to conflict,
poor governance or state collapse. Places like Afghanistan,
Somalia, Liberia, Sudan, Pakistan and potentially Iraq.
These places can serve as safe havens, recruiting
grounds, staging bases, for terrorists. They often have
precious minerals like diamonds or narcotics that can
finance their activities. Terrorists are able to take
advantage of these countries porous borders and weak
institutions to move men, money and weapons around.
The administration acknowledges this problem, but
it does nothing about it. The first page of the administration’s
national security strategy says, “America is now
threatened less by conquering states than we are by
failing ones”. But there’s absolutely no
administration strategy for dealing with this problem.
There are no resources directed to it. There’s
very selected and limited engagement in conflict resolution
and prevention, and there is really nothing to do when
it comes to nation-building in places beyond Iraq, and
we can argue about Afghanistan.
So what do we need? We need a strategy that combines
preventive action and innovative responses to the problems
that failed states pose. There’s no one size fits
all solution to this, but there are perhaps some common
elements of an invigorated strategy which if we pursue
them could make a difference.
First of all, improving our intelligence collection.
You wouldn’t believe how little we know about
what’s actually going on in parts of the world
where states are prone to failure. We need to focus
that collection and analysis on trans-national security
threats. Second, we need to be more rather than less
engaged in brokering and keeping the peace in failed
states and not just places where the Christian right
is concerned or where there may be nukes.
But everywhere around the world, all places at this
stage given the trans-national nature of the threats
we face have some degree of importance to the United
States. Next we have to sustain nation building not
only in Iraq but elsewhere. Places like Liberia and
Congo we gotta invest seriously to do that. Next also
we need to target aid, some trade benefits, even debt
relief which can be used selectively to help spur long-term
recovery in weak and failed states.
Finally, we even need to contemplate providing in
certain circumstances targeted counter-terrorism assistance
to failed states that may be in very dangerous neighborhoods.
Successfully rehabilitating such states will not only
demonstrate that we care about what goes on in other
people’s worlds and when their security is threatened,
but it will pay direct security dividends for the United
States and even conceivably over the long-term economic
benefits if nothing else in the form of reduced humanitarian
assistance but more meaningfully over the long-term
with respect to trade and investment particularly as
a number of these places are oil-rich and mineral-rich
So let me just wrap up and say obviously the challenges
we face are tough, but as Clyde and others have said
to the extent we can have strong partners working with
us to face these challenges and secure our interests
we will be more effective. But in order for countries
to want to follow us and work with us and in order for
us to protect our interests we need to lead differently.
That means more justly, more openly and more generously.
Obviously we can do it if we only have the will and
the wisdom to change. Thank you. (Applause)
RR: Thank you Sandy. I was asked
to comment briefly on two objectives in the economic
arena. One, a strong American economy and secondly building
a bit on Susan’s comments with respect to combating
global poverty. Let me start with the U.S. economy.
We have enormous advantages. But if we’re going
to realize the potential that we have we have got to
make sound policy choices, and if we make the wrong
policy choices then that can lead to real difficulty.
With the limited time that we have I’m going
to focus on only one issue and that is the unsound,
wrong fiscal position of the United States government
which is a serious threat to our economic well being.
In January 2001 the Congressional Budget Office bipartisan
projected a ten year surplus of 5.6 trillion dollars.
Recently Goldman Sachs and Company projected a ten year
deficit of roughly 5.5 trillion dollars. That is deterioration
of roughly eleven trillion dollars which if you adjust
for comparability of methodologies is nine trillion
dollars, and that’s the number to keep in mind
— a nine trillion dollar deterioration.
The tax cuts in 2001 and 2003, assuming as their proponents
argue, that the cuts scheduled to expire will instead
be made permanent and including debt service account
directly to one-third of that nine trillion dollar deterioration
and account directly to over 50% of the deficit projected
for the next ten years.
Furthermore, indirectly, the effect was even greater
because those tax cuts at least in my judgment, undermine
the fragile political consensus that had developed around
fiscal discipline. The first thing you learn in introductory
economics is that supply and demand determine price.
The government’s fiscal deficit is an important
part of the demand for capital and therefore in determining
interest rates as agreed by virtually all mainstream
More specifically, when the federal government borrows
the pool of savings available for private investment
shrinks and the price of that capital interest rates
will rise. The deficits that matter however are not
current deficits but rather expectations about future
fiscal conditions since those are the conditions that
are most relevant to the buyers of five and ten year
bonds that are central to our economy and also to mortgage
Thus, short-term deficits can under many circumstances
be used in response to a strong economy. The problem
is long-term structural deficits which is what we have
now created in this country. The timing of the effect
of projected long-term deficits though is complicated.
When private demand for capital is sluggish, interest
rates will be low and markets will focus very little
on long-term fiscal conditions. That’s been the
case in the last three years.
Once private demand for capital becomes robust that
will collide with the government’s demand for
capital to fund deficits. Markets at some point will
focus on future fiscal conditions which in this case
are substantial long-term deficits which will get worse
as each year passes because of the increasing rate of
retirement of the baby-boomer generation, and interest
rates will rise substantially.
Moreover, the increase in interest rates can be even
more severe if the markets begin to believe that we
are in true fiscal disarray and that the government
is likely to rely or may possibly rely on inflation
rather than the restoration of fiscal discipline to
deal with the problems that it has created.
In addition to the high likelihood that with substantial
deficits we will have substantially higher and deeply
threatening interest rates, as evidenced in the morass
in the early 1990s, unsound fiscal conditions can become
a symbol in peoples’ minds, in the public mind,
of a more general sense that we have lost control of
economic policy and that can have a serious undermining
effect on consumer confidence and business confidence
which is exactly what happened in the early 1990’s.
Finally, unsound fiscal conditions greatly reduce
the flexibility of our economy to respond to emergencies.
For example, a strong fiscal position enabled us to
deal with the tragic attack of 9-11 without risking
a sharp increase in interest rates or a sharp adverse
impact on our economy.
Furthermore, our long-term fiscal mess will increasingly
reduce the ability of the United States government to
respond to and deal with the issues that the American
people want government to respond to and deal with including
national security. Repairing this enormous damage and
avoiding the tremendous threat that it poses to our
future economic well-being and our national security
will take increased revenues, discipline on expense
and entitlement reform and in my view all of that will
only be accomplished by our political leaders coming
together in some sort of bipartisan process to take
joint responsibility for the very difficult political
decisions, decisions that are very difficult both politically
and substantively that will have to be made.
Let me make within my allotted time only two comments
on the second issue, our imperative self-interest as
Susan said, in combating global poverty. Firstly, aside
from being a moral issue, although I think it is a very
serious moral issue, in today’s tightly knitted
world problems of drugs, illegal immigration, trans-national
environment problems, the spread of disease and much
else, can reach the industrial countries far more readily
than countries where poverty prevents these issues from
being dealt with effectively.
An impoverished people as Susan suggested are more
likely to feel alienated and to provide havens for terrorists
and also for those who are seeking to foment political
instabilities in countries that are of critical importance
to us. Secondly, we spend roughly twelve one-hundredths
of one percent of our GDP of our economy on foreign
assistance in all forms in a world where as Susan said
the World Bank has estimated that roughly 50% of the
global population lives on less than two dollars a day
and roughly 20% lives on less than a dollar a day.
Even if as now proposed foreign assistance is increased,
that still is only something like fourteen one-hundredths
of one percent of GDP which is a small fraction of what
our self-interests should lead us to do. In my judgment
that is a priority that needs to be changed dramatically.
The reconciliation between this imperative to far more
substantially fund combating global poverty and my prior
fiscal discussion lies number one in having sensible
priorities and number two in having adequate revenues
to meet our national security needs in the context of
a sound fiscal regime.
The conclusion I draw from all of this is on the critical
issues that I have mentioned today and on many others—our
future economic well being and our future national security
are heavily dependent on a dramatic change in policy
direction. Thank you. (Applause)
SB: Now I guess the bad news is that
we’re headed in the wrong direction and the worst
news is we can’t afford it. Let’s now open
this up to the floor to questions to individual panelists
to all of us. I think you shout. Are there microphones?
Ah, you shout and you get a microphone. Doesn’t
work in my house though.
I hope it works. It does work. Hi. I’m Carroll
Bogart from Human Rights Watch. I’ve been heartened
and a little almost amused at the proclamations of support
from a few speakers this morning for the international
criminal court. It may be that the Bush Administration’s
greatest contribution to international justice has been
forcing the Democratic Party to accept the international
I guess I want to probe the robustness of that support.
Sandy Berger, perhaps you’d like to take a crack
at that. (Laughter)
SB: Well I’m very proud of
the fact that we signed the treaty for the international
criminal court. As you know it was extraordinarily controversial.
The fact of the matter is in my judgment the United
States as the dominant power in the world is going to
be often held to a higher standard, and there is the
potential for politization of the criminal process.
So as we negotiated the—the treaty we tried
to negotiate within the treaty and within the language
of the treaty a number of safeguards which would deal
with the concerns that military had and quite honestly
the Senate had that American troops would not be dealt
with in a harsher way than others simply because of
resentment of American power around the world.
At the end of the Clinton administration we made the
decision to sign the treaty, and that then was followed
by many others signing the treaty. I’m glad the
treaty has gone into effect. Now what you’re referring
to is we did not submit the treaty to the Senate for
ratification. It would not have been ratified in this
Senate. We felt that the better way to deal with it
was to continue to work with the parties as a signatory
but not necessarily as a member to continue to narrow
some of the gaps that were of concern to those in the
Senate and would have to ratify the treaty in the first
So again, I’m very proud and worked very hard
myself to get the United States to sign the treaty.
I think events perhaps in — I think the premise
of your question is a fair one. I think perhaps of events
for the last two and a half years where we’ve
seen an Administration that has not only said we have
reservations about the treaty but has said we want to
opt out of international law completely with respect
to American conduct abroad, has been so horrified, so
outrageous as to perhaps make one re-think whether the
balance is in fact adequately struck in the current
FS: Thank you. Judith Kip for Council on Foreign Relations.
I’d like to ask Sandy Berger and Bob Rubin in
particular. It seems to me since the Second World War,
institutions have been designed for the Cold War --
bilateral relations and alliance relations with a clear,
bipolar world. Do you think that our national institutions,
our financial institutions, the NSC, the Defense/State
Department, the way we think in government about trans-national
threats in a globalized world that we at home in this
town inside the beltway need to reform.
The second part of that same question is the American
people because of leadership are not so aware of what
globalization means to them and 9-11 smacked us in the
face with globalization. How do we reach out to the
American people and bring them into the dialog that
globalization is here to stay? What happens on the other
side of the world matters to whether they’re going
to be able to buy shoes for the kids at the end of the
SB: I’ll give you two quick
answers and then let Bob answer. As to the second question,
Judith, the great lost opportunity of 9-11, tragedy
as it was, is whether or not the President rose adequately
to the job of Commander-and-Chief he did not rise to
the job of educator-and-chief. If there ever was a moment
which said what happens out there in the world in places
that you can’t even pronounce directly and immediately
affect your lives.
Where you go to school, where you live, where you
work, where you’re children are. It is 9-11, and
that opportunity was lost by the President in my judgment
and I think unfortunately true because 9-11 obviously
is the ultimate perverse expression of globalization.
As to your first question, I think it’s also a
fair question. That is how do you organize the institutions
of government across all of these lines?
We tried in the beginning of the Clinton administration
I think a rather successful experiment. I guess it was
an experiment because it died after we left. But —
and I think Bob did a marvelous job of creating something
that never had been created before — bring all
the economic institutions together. When Susan was talking
as her first prescriptive point about intelligence being
the first line of offense in thinking about trans-national
threats the Vice President gets very little —
Vice President Gore, excuse me, the previous Vice President
— gets very little credit for something that he
did which was to force the or encourage the intelligence
community to look at the kinds of trends in the world
that relate to failed states.
For the first time and with great excitement the intelligence
community was looking at deforestation and water issues
and other things which correlate highly with failed
states. So I do think there are institutional changes
RR: Yeah. Let me take the question
in the order you asked them. On the first one, the question
of whether we need to be organized somewhat differently.
Your organization now has — the Council on Foreign
Relations — has this geo-economic center. If I
understand its underlying principle — it was basically
that we are going to have to think differently in government
about the unity. President Clinton talked about that
in campaign actually, about foreign policy and economic
policy coming together and having people trained to
do that had having institutions and government across
As Sandy said, I think we actually did a reasonably
good job in our administration in crossing lines within
a structure that wasn’t designed for that purpose.
But I think that the reform of that structure to more
accurately reflect that reality would be useful.
On your second point, I remember President Clinton
saying to me once that one of his greatest disappointments
for the time he was in office was that he wasn’t
able to more effectively convey to the American people
the great value of trade to their well being. I think
it is a great challenge for all of us. I agree with
something Sandy said. I think that 9-11 did create a
different opportunity for our political leaders to do
It seems to me we’re falling far short of what
we could do in terms of using that opportunity to explain
to the American people all of these dynamics in terms
of how what happens to the rest of the world affects
us. I happen to know that there’s somebody trying
to organize and group of foundations to begin a well
funded public education campaign on this very issue,
but so far they’ve not been successful raising
But I do think our political leaders have an unusual
moment in time to try to do that. I think the media
could do a great deal more should they—should
they choose to do it. I think it’s imperative
that it be done.
SB: Other questions. Gentleman over
MS: Hi. Jim Trial from the New York
Times Magazine. Susan Rice said we need to be serious
about the challenge of rehabilitating failed states.
So this is a question for her as well as well as others.
It sounds like the kind of open-ended potentially immense
obligation which during the 2000 election Bush accused
the Democrats of incurring. So I wonder does that entail
just the kind of Islamic states like Pakistan that we
fear will become havens for terrorists or African states
Does it involve just small African states like Sierra
Leone or Liberia, or would it involve the Democratic
Republic of Congo as well? Also, in the end, what do
we mean by rehabilitating? How deep an obligation is
that we’d be incurring?
SR: Well, it would be nice if we
could pick and choose those failed states that may come
back to bite us. But the fact is a number of them have
and a number of them can. But this is not something
we need to do by ourselves. The United States is not
the only country that is affected by the threats these
states pose and spawn. So there is I think a very critical
role for other developed countries to play, for countries
in the regions in which these states reside to play.
So in effect, yes, we have to talk about Africa, parts
of Africa, not just Pakistan. But the United States
doesn’t have to pay the bill alone. We don’t
have to bear the peace keeping burden alone. We’ve
done that unfortunately in Iraq, needlessly in large
part by the way we’ve managed the problem. So
we are proposing to spend in Iraq in a little more than
a year double what we spend on the entire rest of the
world with respect to foreign assistance.
That’s arguably a bit out of whack. If we took
a portion of that and recognized that first and foremost
we have some preventive challenges — the opportunity
to try to deal with conflicts before they get far out
of control. Secondly, that we have a diplomatic role
to play once they have broken out. Need to be much more
energetic about that in partnership with the U.N. and
Thirdly, when in fact the thing has gone over the
edge there is a role for the United States in partnership
with others through the United Nations and through regional
organizations to lend a role in peace keeping and post-conflict
reconstruction. But even in places like Liberia, where
arguably the United States has the greatest historical
ties and the world is looking to us, we needn’t
do that alone and we needn’t do it even in spending
more than 50% of the resources.
We’re spending virtually 80% or 90% in places
like Iraq. We can do it for a lot less if we do our
share and if we bring others along with us.
SB: Clyde. You want to say something?
CP: Yeah. I think we need to look
at that question and maybe a little bit more broadly
and also in terms of doing no harm. I was in Mexico
two weeks ago and just happened to have a conversation
with Ongo Gurilla (ph.), the former Mexican Finance
Minister, who made this very interesting comment to
me. He said you know there’s another weapon of
mass destruction that you Americans aren’t paying
attention to. It’s just south of your border,
and it’s about to explode. He was of course talking
about the situation in Latin America.
You think about Mexico which is critical to our national
security. The Mexican economy is not succeeding. NAFTA,
for all of the good that it has done, is not really
answering Mexico’s problems partly because we’re
not fulfilling the obligations of NAFTA ourselves and
partly because NAFTA, while a good step forward was
not a complete step forward.
We didn’t do with Mexico what the EU for example
did with Portugal and Spain when it brought them into
the European Union. Let’s take a look at Bolivia.
We have a drug problem in the United States. We attempt
to deal with it by stamping out the coca crop in Bolivia.
This deprives Bolivian peasants of the only livelihood
they’ve had for two or three thousand years. They
then throw out the democratically-elected government
and become a breeding ground potentially for drug terrorists
and others as Bolivia fails as a state.
It would really help if we would deal with our drug
problem honestly and sincerely domestically. That doesn’t
require aid. It doesn’t require money. It just
SB: Bob. You want to add one word?
RR: Jim, you phrased your question
as obligation. I think I would have framed the question
differently and said our self-interest.
SB: Next question. Yes.
MS: I just want to briefly follow
up on globalization. I was recently asked to speak to
a bunch of AU undergrads — American University
undergrads — because they knew that I had served
at Treasury under you, Mr. Secretary, and I believe
that our trade policies were correct and I tried to
defend them, but as a humble English major I was not
as good. So to follow up on that question and the educating
of the American people how especially in this democratic-elected
year do we help educate our populist that our trade
promotions — GATT, NAFTA and globalization is
good for us when everybody is looking at the unemployment
rate and the manufacturing job decline?
MS: I think it is going to be a very
central issue at least rhetorically in next year’s
campaign. I think it is complicated. Unfortunately,
trade is a very complicated issue because the dislocations
are obvious and invisible and the benefits which I think
overwhelmingly met out as a plus are diffuse and seldom
recognize the benefits of trade. I think somehow or
other we’ve got to find a way to far better educate
the American people about what trade does. I think political
leaders can do it if they would, but I think in an election
year that’s probably relatively unlikely.
Therefore I think other efforts need to be made, and
I think there are some people who are trying to figure
out how to get the funding for such an effort. Sandy,
do have any comment?
SB: Well, the only comment I would
make is that towards the end of the Clinton administration
the President began and certainly has in many of the
speeches he’s given since to articulate better
the —both the bright side and the dark side of
globalization. I think that for too long we worshipped
at the altar of globalization.
We all know it’s inexorable. It’s happening.
But we also know that the burdens and benefits are not
shared equally. That there are positive benefits of
globalization that we need to cultivate, and there are
bad effects of globalization including increased disparity
that we have to deal with. I’m not sure that the
globalization argument, the equity argument, can proceed
detached from the trade argument as we go forward in
the first decade of the 21st century.
MS: If I could just add to that quickly.
I mean I think that American consumers instinctively
know the value of trade because they soak up and revel
in all kinds of important products. It’s not too
hard to demonstrate through the vast American public
of consumers that they have a higher standard of living
because they’re able to get Toyotas and Sonys
and what have you.
The real issue here in my view is one of displacement.
Surely as Bob Rubin said, the winners outnumber the
losers in globalization and in trade, but there are
losers. The big fallacy in the United States has been
that we neglect the losers because we tell ourselves
that trade is a real win solution and thereby we neglect
the displacement. The opposition to globalization comes
from people who are losing their jobs.
The answer to that is to have a serious program of
addressing the costs of displacement. Remember, President
Bush imposed the steel tariffs on the steel industry,
on steel imports, right after he was elected. That was
an attempt to deal with the problem of lost jobs in
the steel industry. It would have been easier and less
expensive to the U.S. economy to simply buy out the
steel industry. The market capitalization of the entire
U.S. steel industry decline was about two billion dollars.
You could do that for two days of Iraq. Buy it out.
Pay off the workers for the rest of their lives and
you won’t have any opposition to steel imports.
That kind of an approach on a broader basis I think
is the only thing that will convince the American public
that globalization is truly a win/win proposition.
SB: And who said this conference
doesn’t have new ideas. (Laughter) We have time
for maybe one or two more questions.
MS: I have a question. I guess it’s
for Susan or maybe the other. How do we — our
approach to Islam. Islamic evangelism is going to grow
in Malaysia. It’s already spreading in Indonesia.
President Bush sort of showed how naive not only of
himself but the American public is in his visit to Indonesian
Bali with a group of Islamic moderates when he was confronted
with the fact that there is a great amount of hostility
in the Islamic world towards America.
Yet we don’t really know how to approach it.
We talk about a war, a religious war, which only serve
to inflame these passions. Yet as a country we don’t
know really how to real with or reach out to moderate
Islamists. So it’s a question that’s very
difficult. It’s mixed up with terrorism, terrorism
financing. So I’m just asking you what are some
ideas as to what we can do to sort of tone down, reduce
the heat and reach out to the 1.2 billion Islamic people
in the world?
SR: I think there are many facets
to this. I think we’ve gotta get beyond the simply
rhetorical statements that we understand Islam to be
a religion of peace and our seemingly wasted investments
in some other useless public diplomacy. We actually
have to put some substance behind that. It’s not
good enough for the President to go to a mosque once
a year. We actually have to show through some of the
steps I was talking about real concern for the issues
that affect people all over the world and in particular
people in the Muslim world.
They are in poverty. Half their youth are coming to
adulthood without any job prospects. They live under
often repressive regimes that we are viewed as coddling.
Some of our policies are viewed as not being sufficiently
balanced. Some of those things we can address through
our leadership and through the nature of our investments
in parts of the world and people overseas. I think that’s
part of it. But simply talking a good game when our
credibility is so low is obviously not sufficient.
Let me just say one last thing. I was visited yesterday
by the new ambassador of Senegal. Senegal is a moderate
Muslim country in francophone West Africa that has long
been a friend of the United States. He wants to know
how can we get on the radar screen? How can we build
a stronger relationship with the United States? How
can we matter?
That is precisely the kind of country that given our
history, given our relationships first we could learn
something from. Secondly, if we could be seen to be
partnering with them in a way that is beneficial, mutually
beneficial, they can help us spread the word through
our actions, not just our words, that we are interested
in the circumstances and the fates of people all over
the world including if not especially in the Muslim
SB: Final question. Yes.
FS: Wall Street is giving obscene
amounts of money to the Bush re-election campaign. Given
the policies, economic and the foreign policies of the
Bush administration as progressives how are we supposed
to deal with the fact that they’re doing this?
They’re in control of our money and so much of
the world’s wealth. How should we view this? Is
this just outright greed?
MS: Very little of the contribution
was mine, but…
FS: Well, they used to have a lot
more of mine.
MS: But our chairman of our panel
will respond to that since he was kind enough at the
beginning to ridicule me I will now do
SB: There are two answers. Number
one I don’t think we have an adequate campaign
finance system, and I hope that one of the things that
we will talk about over the coming months — we’re
not going to do anything obviously about it in this
cycle — but we’re engaged and embarked upon
something here that is more than involved and looks
beyond the horizon of one election cycle.
I think we have a broken continuum not withstanding
the legislation we have, we’ve passed. A broken
way of financing our elections. To me, the way to buy
back our democracy is to publicly finance campaigns.
The cheapest investment we could possibly make. (Applause)
I think the second thing, however, is your own engagement
because the fact of the matter is that the candidate
and the party with the most money does not always win.
It’s not to say it is not an advantage.
Clearly it’s an advantage. But it is not a guarantee.
I think we have to look to ourselves individually and
collectively and decide how intellectually, politically,
in terms of financially and otherwise we can make a
genuine commitment to change. I think this conference
is a pretty good start. Thank you. (Applause)