Posted on December 31, 2001 in Washington Watch

2001 began awkwardly. It seemed from the beginning that this was not destined to be a good year. As the year began here in Washington, there were signs of problems, on both the domestic and international fronts. The U.S. Presidential election was still a subject of some controversy. The closest race in U.S. history had been decided a few weeks earlier by a vote of the Supreme Court. Both the irregularities in the vote and in the process that resolved the election had left the nation quite divided. With the President-elect in Texas naming his Cabinet and the Capital city being readied for his inauguration, many voters remained angry and alienated.

In the Middle East, the intifada was in its fourth month, with violence having already taken a terrible toll in Palestinian lives and the hope for peace.

In the closing days of the Clinton Administration, the President would offer his plan and deliver a speech promising a Palestinian state with a capital in Jerusalem. Israel, too, was in the throes of a fateful election campaign, while erstwhile Israeli and Palestinian negotiators were engaged in last minute talks in Taba attempting to close gaps before Israeli voters decided to take their state in a new direction.

Alas, the efforts of the negotiators were too late. Barak, though still supported in the U.S., had lost his domestic support base. With Israeli opinion moving to the right and with even Labor voters disenchanted with their leader’s erratic governing style, Sharon appeared to have victory in hand. When the Taba talks adjourned for the election, it marked the end of Israeli-Palestinian peace talks in the Oslo framework.

By January 2001, the U.S. economy was showing the first signs of a slow down. The longest economic boom in modern history was coming to an end. Despite early indications of a downturn, confidence remained high and many experts were still predicting a turnaround by year’s end.

Even with warning signs domestically and internationally, the optimism of the American public still defined the U.S. policy debate. From Reagan through Clinton, Americans had seen dramatic and positive changes in their world. The U.S. had won the Cold War and had emerged as the world’s sole superpower. Decisive wars had been won against Iraq and Serbia. Former enemies like North Korea and Cuba were now seen as weakened and impoverished. Peace had been negotiated in Northern Ireland and a number of agreements had been completed in the Middle East.

As late as 2000 the U.S. stock market showed no signs of let up in its continued growth. Prosperity had come to millions and those who had not yet succeeded had hopes that they too would be able to climb the ladder to prosperity.

With unprecedented budget surpluses predicted over the next decade, the U.S. fiscal debate focused on how to spend that surplus. Republican advocates of smaller government, sought to cut taxes and “give the surplus back” to U.S. voters. Democrats, on the other hand, determined that the wisest course was to pay off the trillion dollar U.S. debt that had accumulated from Reagan era tax cuts and to set some of the surplus aside for needed social programs.
This was the context that defined the world and the U.S. at the beginning of the Bush era, 2001.

Initially controlling both houses of Congress, Bush succeeded in passing the tax cut proposal. As the economic downturn worsened, the stock market dipped and the U.S. sank into recession, and the projected budget surplus turned into predictions of a deficit. With Republicans losing control of the Senate to the Democrats the partisan debate only intensified, with Democrats insistent on challenging Bush’s economic policies in the lead-up to the 2002 elections.

In foreign affairs, the President initially embarked on a course that seemed quite novel. He sought to foster hemispheric ties with Mexico and Canada, while acting more unilaterally in other areas of the world. Announcing its early intention to abandon several international treaties and covenants, the administration caused concern even with our closest European allies.

In the Middle East, the new administration declared that it would seek greater support for a tougher new policy toward Iraq, while at the same time, disengaging from Clinton-style active diplomacy on the Israeli-Palestinian front. Both efforts only created more frustration in a Middle East and more stress in the U.S.-Arab relationship.

And so by mid year, the situation was strained. The Congress was headed toward gridlock on several issues, the U.S.’s standing abroad had suffered, and the Middle East was quite tense.

Then came September 11.

The impact of the attack on the American psyche has been profound and transformative. The optimism of the security bubble that defined U.S. life during the past 20 years has been shattered. The resultant new insecurity has had both economic and political consequences.

September 11 had the immediate effect of accelerating the economic downturn. With air travel, tourism, and border issues still unresolved, there may even be long-term structural changes in store for the economy as well.

President Bush, by all accounts, has personally fared well, in the eyes of many Americans. The insecurity and anger created by the terrorist attacks have produced a rallying of support for the President. His ratings are high and his actions are supported by the vast majority of Americans.

Because structural concerns that pre-date September 11 remain, the question is how can the president use his support to address fundamental problems facing the country. Or will he? Issues that had appeared to define the nation’s agenda at the beginning of 2001 are now rarely discussed. Election and campaign finance reform, reform of the social security and health care system, the matter of the crippling national debt-all have been relegated to the back burner, while issues of national defense and homeland security have emerged as the dominant themes of the day.

Similarly world problems that existed before September 11 are still waiting to be solved. While the U.S. won initial world support, strains are once again appearing even with our European allies.

If the situation in Afghanistan and the campaign against al-Qaeda continues to progress, and if the President uses U.S. leadership to help resolve the Middle East conflict, Bush may maintain his positive ratings and the U.S. can retain strong world support.

But too much emphasis on unilateralism, a negative turn about in foreign affairs, a continuing worsening of the U.S. economy or a scandal or some other unexpected domestic difficulty and the U.S.’s standings could suffer.

Here in the U.S., 2001 ends with even greater uncertainty and potential for difficulties than before. The nation bounced back from a terrible blow and has shown great resolve and support for its President. But as resilient as this country is, warning signs remain. There are issues that must be addressed on both the domestic and international fronts, if 2002 is to be a better year than the one just completed.

For comments, contact jzogby@aaiusa.org.

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