Formulating Foreign Policy

The Cold War was both the best of times and the worst of times.  Communism versus Capitalism.  Which system would win?  American leaders believed that if American businesses were given the opportunity, they would convince the world that democratic capitalism was a superior form of government.

So, “containment” was the code word for America’s foreign policies. It was easy to understand.   In essence, American foreign policy was based upon the notion that if the Soviet Union and any other country that fell under the Soviet shadow could be contained (not allowed to further expand), that in time Communism would die.  Why?  Because its businesses would be less efficient.

For the most part this was a pragmatic foreign policy.   With US ships, planes, and troops, it allowed American businesses to have free range over most of the world’s population and geography.  To be sure there were plenty of white knuckle times, when America was close to pressing the nuclear weapons button in response to some provocation.  But as history has shown, cooler heads prevailed.

So fast forward.  Try and answer this question, “what is the basis for today’s American foreign policy?”

Consider the major American business successes.   Large traditional manufacturers like GE, DuPont, General Motors, Ford, Boing etc expanded from their US developed markets by exporting to foreign countries.  In time these companies built foreign plants, set up joint ventures and in many cases built their own foreign operations from top to bottom.  Keeping the seas open, access to key raw materials assured, and protecting against foreign appropriation of American assets underlaid US foreign policy.  What was good for these companies was good for America.

Now American business leaders are comprised of different types of companies.  Apple, Google, Facebook, or Microsoft are emblematic of this new group.  While their products have been hugely successful and world demand is high, all have engaged in multi-country strategies whereby they incorporate in dozens of countries primarily for the purposes of limiting liability and avoiding tax payments, not building revenue.  What type of foreign policy can this “tax avoidance” strategy justify?

Or consider, financial institutions whose “business” is manufacturing profits from bizarre derivatives.  In this game played in computers and in cyber space, money knows no boarders.

So what role should US foreign policy play, and how should this policy be formed?  Hmmm.

It should be pretty clear that Syria or Iraq with bombs exploding daily does not represent a challenge to US business (new or old).  It should also be clear that the Israeli-Palestinian issue need never be settled if the concern was how to support healthy US business growth.

And it can be easily argued that military presence in countries such as Iraq, Syria, Afghanistan or any number of African countries serves no useful purpose if American business (including banking) growth was a justification.  Hmmm.

I do not know whether President Obama (or his advisors) have had thoughts like this.  I am unfamiliar with details of any coherent US foreign policy.  Compounding this problem, how does any government form foreign policy for businesses whose primary goal is to avoid taxes or banks whose loyalty is to a unit of currency and not where the currency is located?

I wonder whether President Obama recognized the true depths of the mess he inherited from former President George W Bush?

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