by Patrick J. Buchanan – October 27, 1998
Between 1992 and 1994, a historic swap took place in U.S. politics. Republicans, who had had a quarter-century lock on the White House, gave it up to the Democratic Party, while Democrats, who had had a 40-year lock on the Congress, gave it to the GOP.
The GOP traded a horse for a rabbit. Congress has become about as relevant to the most fateful foreign-policy decisions as the student council at Ridgemont High. Consider the last 10 days:
— The United States has given an ultimatum to Belgrade: Pull your troops out of your Kosovo province, or face NATO air strikes. But Congress never authorized any ultimatum or air strikes.
— At Wye Mills, Md., President Clinton agreed to have the CIA monitor and judge compliance with the Netanyahu-Arafat accord. We are diverting crucial intelligence assets to duties having nothing to do with U.S. security, exposing CIA agents to terrorism, and ensnaring America in a 50-year-old ethnic, religious and territorial war. Congress was out of the loop.
— The New York Times reports that Treasury Secretary Robert Rubin is cobbling together a $30 billion Mexico-style bailout of Fernando Cardoso’s Brazil, with tax dollars that Congress never appropriated.
Clinton’s cohorts have, in 10 days, trapped us in possible foreign wars, foreign quarrels and foreign bailouts. The New World Order rises brick by brick, as the GOP chats up its hopes of picking up seats next Tuesday. Why, pray tell, does it want them?
With $18 billion sent off to the International Monetary Fund as Congress’ final act, and a $30 billion bailout of Cardoso on the way, at last we know where our budget surplus is going — to finance Brazil’s deficit.
Aiding Rubin’s public relations offensive are journalists who know better. The Times’ story reports the bailout is to “insulate Brazil and the rest of Latin America from the financial turmoil circling the globe.” It is being sold by the Big Media as a U.S. flu shot for Latin friends who are faced with an Asian contagion that is no fault of their own.
But in the case of Brazil, this is as fraudulent as it was in the case of Moscow, where we now know we were lied to. A glance at its fiscal picture shows that Brazil’s problem is Brazil, not Asia. And $30 billion will not bail Cardoso out; it will only bail us in.
Brazil is running a budget deficit of 7.5 percent of gross domestic product; half of its $70 billion in hard currency has left the country since July; interest rates have been pushed up to 40 percent. This is like the United States running a $640 billion deficit and Alan Greenspan hiking interest rates to 40 percent to finance it. If that were our situation, could a U.S. president get away with claiming it was all Asia’s fault?
Not to worry, we are told, now that Cardoso is re-elected, he will impose an austerity program that will make our bailout billions a wise and safe investment. But, as the saying goes, fool me once, shame on you; fool me twice, shame on me.
It took us 30 years to erase our own deficit. And if neither Ronald Reagan nor a GOP Congress has been able to cut spending to 20 percent of GDP, does anyone believe Cardoso, with his leftist coalition partners and neo-Marxist opposition, can wipe out the equivalent of a $640 billion deficit in two years, or three, or four?
Unlike politicians, markets do not lie. What the markets are saying is that Brazil’s regime is fiscally irresponsible, it cannot or will not control spending, and its debts are so huge that a default or devaluation is in the cards. In demanding 40 percent interest on money, Brazil’s markets are saying: You take a huge risk buying our paper.
But if investors are dumping Brazil’s paper, unless paid loan-shark rates, why would the U.S. government put tax dollars into it?
Answer: Clinton’s globalists are investing in a global world order. They are ready to take risks to bring it off. They have the courage of their convictions and confidence in their capacity to buffalo the frightened free-marketeers of the GOP Congress.
What an opportunity has been lost. When Asia crashed, the whole idea of an interdependent Global Economy was discredited. The evidence for an America First policy of protecting our markets from foreign man-made disasters was being daily adduced.
The Republicans could have thundered: “We told you the Mexican bailout would come back to bite us! Not one more dime for the IMF! Let free markets, not socialist bureaucrats, decide winners and losers in the world economy.”
Instead, terrified that Clinton would blame them, they buckled and broke, voted the IMF another $18 billion and kicked the can up the road. Thus, when the collapse comes, some hapless Hooverite Republican may be sitting in the Oval Office.
Tell us again why we should all go out and vote for the GOP.