03 March 2005

Foreign Influences

Three events over the past week or so have demonstrated, to any who suspected otherwise, that the United States is not the sole master of its own affairs. Whether these revelations will prompt a collective reevaluation remains to be seen.

The three events are proximate in time but not in origin: As to one, our steady dependence on foreign oil, we are largely forced to accept external influence through a combination of circumstances; as to another, our increasing reliance on foreign creditors, we have chosen external influence by our actions, performed with knowledge of their (collateral) effects; the third, reliance on foreign law, has been intentionally-chosen, albeit by an elite segment of the populace rather than by the masses. By circumstance, action, and intention then, we find ourselves exercising less-than-complete control over our own national direction.

Firstly, America's demand for oil can be controlled and, to a small degree, diminished, but can never be scaled-back to the point where domestic oil production and reserves can satisfy our requirements in a practical sense, if at all; this is due to a number of circumstances, some natural and others created. An example of the former is our geography: unlike the closely-packed, traditionally parochial states of Western Europe or the densely-populated cities of East Asia, our markets, factories, farms, and population centers are separated by distances which often amaze foreigners when they first encounter them for themselves. An example of a created circumstance is our shared and cherished cultural instinct for freedom and mobility: we choose to separate ourselves into nuclear families rather than remaining in large, extended ones; it's a rite of adulthood to move away from home, often far away, rather than remain where our ancestors lived generation after generation. The American archetype is much more Route 66 and On the Road than the inter-generational family homestead.

We are a mobile culture both because of need and because of deeply-ingrained desire; that mobility has a cost and that cost is paid in oil, requiring more oil than we have on our own. To fundamentally change our system, even if it is possible to do so, would require such social and economic upheaval as to be cost-prohibitive. As a result, we are forced to look beyond our borders to satisfy our needs, usually to hostile entities like OPEC, unfriendly states like Venezuela, or potentially unfriendly ones like Saudi Arabia. Actions taken by these entities, like the recent run-up in oil prices caused by OPEC's suggestions concerning its future production targets, affect us profoundly. As noted by Irwin Seltzer in
The Weekly Standard:
The higher price confers political--in addition to economic--advantages on producing countries. Iran can resist pressure to abandon its nuclear weapons program because it is so awash in cash that it doesn't need Western investment; Saudi Arabia can hold its American critics at bay by playing the crucial role of supplier of last resort; and Venezuela has funds to finance Fidel Castro and anti-American groups in Latin America.

The disadvantages to America are obvious. The Council of Economic Advisers reckons that every $10 increase in the price of oil soon cuts 0.4 percent off real GDP. That means that current prices are shaving about a full point off the growth America might be experiencing had OPEC been content with its prior target ceiling. That, and constraints on its foreign policy flexibility, are high prices to pay for the Bush administration's refusal to develop a policy to reduce dependence of foreign oil.

Secondly, we have become a debtor nation comprised of debtors. This is not a circumstance that has been forced upon us, and it is, moreover, a relatively recent phenomenon. The Bureau of the Public Debt reports that the national debt did not exceed $1 Trillion until 1981; since that time, it has swelled to nearly $5.7 Trillion by the end of 2000 and to more than $7.7 Trillion today. (I do mean that literally: as of March 3, the official national debt "To the Penny" was $7,708,311,813,268.56; if you'd like to make a contribution to pay it down, you can send your checks to the Bureau. It gives a new connotation to the term "welfare state", doesn't it?) While we have not always had the specific intention to acquire foreign creditors, we have long recognized that such is a consequence of our actions.

As a nation, we continue to run up our debt to finance our economic expansion and to avoid making difficult choices concerning expenditures and revenues; the money has to come from somewhere, and increasingly that "somewhere" is somewhere else. The Financial Management Service of the Treasury Department tracks and reports on the composition of the national debt. Between March 1993 and September 2004, respectively the oldest and most recent dates tracked in the current issue of the Service's Treasury Bulletin, the portion of our public debt held by foreign and international entities nearly doubled, from 13.8% of the total to 25.2% (Table OFS-2 -- Estimated Ownership of U.S. Treasury Securities [in Microsoft Word format]). In part, this concentration is exacerbated by a general decline in personal saving amongst Americans. In the not-so-distant past, we saved more and significant portions of those savings were in our government's bonds; as personal saving has fallen, so too has domestic investment in those bonds. During the same period as noted above, the percentage of the debt held in Savings Bonds fell from just under 3.9% to less than 2.8%. The "slack" has been eagerly taken up by foreign investors.

Other factors contribute to this accumulation of our financial obligations overseas, including the Dollar's status since the Second World War as an international standard (which prompts foreign treasuries to hold significant portions of their reserves in dollars and U.S. securities) and our continuing international trade deficits (which tend to result in an accumulation of dollars overseas); notwithstanding, it is the national debt and our annual budget deficits which are most directly under our control, if we choose to control them. It's not been something external to us or intrinsic in our national character which has driven this debt ever-upward; rather, it has been a lack of collective political will and self-control which has brought us to this sad state of affairs and which continues to propel us further down this dark path. Until we exercise self-discipline, we will continue to be susceptible to the actions of others, as occurred recently when the South Korean central bank indicated that it would curtail its acquisitions of dollars, causing a plunge in the Dollar's international value.

Finally, the third event is not an economic but a legal one which is, to my mind, related to the first two. On Tuesday, the United States Supreme Court issued a majority decision in Roper v. Simmons which interpreted the U.S. Constitution, in part, based upon foreign laws and world opinions. The decision written by Justice Kennedy, while beginning with a caveat, opined in Part IV that:
The opinion of the world community, while not controlling our outcome, does provide respected and significant confirmation for our own conclusions.

Over time, from one generation to the next, the Constitution has come to earn the high respect and even, as Madison dared to hope, the veneration of the American people. See The Federalist No. 49, p. 314 (C. Rossiter ed. 1961). The document sets forth, and rests upon, innovative principles original to the American experience, such as federalism; a proven balance in political mechanisms through separation of powers; specific guarantees for the accused in criminal cases; and broad provisions to secure individual freedom and preserve human dignity. These doctrines and guarantees are central to the American experience and remain essential to our present-day self-definition and national identity. Not the least of the reasons we honor the Constitution, then, is because we know it to be our own. It does not lessen our fidelity to the Constitution or our pride in its origins to acknowledge that the express affirmation of certain fundamental rights by other nations and peoples simply underscores the centrality of those same rights within our own heritage of freedom.

Justice Scalia, one of the four dissenting justices, argued (in Part III) that, "Though the views of our own citizens are essentially irrelevant to the Court’s decision today, the views of other countries and the so-called international community take center stage." He continued that, "the basic premise of the Court’s argument –that American law should conform to the laws of the rest of the world– ought to be rejected out of hand." Finally:
To begin with, I do not believe that approval by “other nations and peoples” should buttress our commitment to American principles any more than (what should logically follow) disapproval by “other nations and peoples” should weaken that commitment. More importantly, however, the Court’s statement flatly misdescribes what is going on here. Foreign sources are cited today, not to underscore our “fidelity” to the Constitution, our “pride in its origins,” and “our own [American] heritage.” To the contrary, they are cited to set aside the centuries-old American practice–a practice still engaged in by a large majority of the relevant States . . . .

While it is not generally noteworthy for the Legislative and Executive branches of our government to, in effect, commit us to international norms and foreign laws through the related processes of diplomacy and treaty adoption, it should be noted that such commitments, like other promulgated laws, are subordinate to the terms of the Constitution. What is significant here is that the Court's Roper holding is the Constitution; by interpreting the Constitution with reference to foreign laws, the appointees of the Judicial Branch has affirmatively-chosen to subordinate our nation's most fundamental laws to, or at least entangle them with, international opinions. Regardless of one's beliefs concerning the juvenile death penalty (at issue in Roper), internationalism, or judicial activism, this is an extraordinary development in American law which will have repercussions henceforth.

Thus, three recent events have demonstrated or established America's reliance on others, with the losses of freedom to choose and control our national direction which flow from such reliance. OPEC's and South Korea's actions have fired shots across our proverbial bow; in Roper, we've taken a broadside to our legal autonomy. We found ourselves subject to OPEC's and South Korea's wills owing in large part to involuntary circumstances and the natural collateral consequences of our own actions respectively; through our Supreme Court, we affirmatively chose to subject ourselves to a foreign will. Whether we ultimately choose to subordinate ourselves to such foreign influences to the degree we currently do or whether we choose to take steps to lessen that subordination, it's time we begin a national dialogue to determine our choice; it is not an option to avoid that discussion for, as many have said before, failure to choose is in itself a choice. The consequences for ourselves and our nation's future are too great to leave our choice to others.


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