Toshio Matsuda, Commentator & Intl Economist

Straight from the Shoulder No.473

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In the U.S. Presidential Election of November 2000, although Democratic Party candidate Al Gore clearly led Republican nominee George W. Bush in support ratings track in the polls, the contest came down to a prolonged battle over the electoral votes of Florida State. Bush eventually emerged the victor by the narrowest of margins (and while losing in the popular vote column). Claiming irregularities with the vote-counting methods adopted in Florida, after the election Gore took his case all the way to the Supreme Court. Arguments on both sides were heard, but the Democrats were unsuccessful in overturning Bush’s victory.

My own prediction for that election was that Bush would carry the day, despite Gore edge in the polls. At one gathering, in fact, I declared: “If Bush loses the race, I will commit hara-kiri right before your eyes!”

The United States is a nation with heavy responsibilities not only to the American people but also toward the world at large. Therefore, the question of who becomes President, and holds the greatest power of any person on the planet, is a critical issue not only for the U.S. and the international community as a whole. Accordingly, the American President must be an individual who is desirable and appropriate for the global political and economic scene. If the President, who wields such heavy influence on the world, is chosen solely on the basis of the support ratings and popularity afforded by the American people at that particular point in time, the outcome can very well pose a certain risk for the U.S. and the rest of the world.

In the past, I have said to the effect that: “There is insurance riding on the U.S. Presidential Election.” Conversely, if no insurance was staked to the race and an unsuitable President were chosen, that would present an inexcusable situation both dangerous and unfortunate for America and the world. Insofar as U.S. Presidents over the years, as well as the U.S. Congress, have repeatedly declared, “America is a country with responsibilities to the world,” in cases when a suitable candidate appears destined to be defeated by an inappropriate candidate the U.S. must take action commensurate to its obligation to the world.

In the Bush-Gore race, strange things occurred in Florida. In a certain county, with the arrival of the morning after the election, two voting boxes were discovered that apparently had not yet been counted. The addition of those votes tipped the results to favor Bush. There were also nagging suspicions about investigations and samplings of convicted felons who lost their right to vote due to their crimes. A research company hired for that purpose by the state authorities at a cost of $4 million was criticized for surveying only Democratic Party supporters.

In retrospect, at any rate, we must ask ourselves who would have made the more suitable President, Bush or Gore, for American and world politics and economics from 2001 and on? Back in 2000, the U.S. economy was at the peak of the so-called “IT bubble” (also known as the “.com bubble”), with money from around the world concentrating in the U.S. There was also no great confusion in the world politically. President Bill Clinton had managed to broker a major easing of the Israel-Palestine conflict, with a balance of power also being sustained between Saddam Hussein’s anti-American regime in Iraq and pro-American countries.

In the second half of 2000, however, surging stock prices in the U.S. and around the world stirred up fears of a stock market bubble. Saddam Hussein, meanwhile, granted use rights for vast Iraqi oil fields to Russia, China and France, moving to strengthen political and economic ties with those three nations. The economy was on the verge of the collapse of the software industry bubble, while in the Middle East the aforementioned cozying up of Russia, China and France to Iraq threatened to undermine the political balance maintained up to that time. The political and economic scenes were on the threshold of the collapse of this IT-centered software bubble driven by the pursuit of money, as well as the breakdown in the political power balance in the Middle East as a result of Iraq. This breakdown came to pass from 2001.

In the U.S. and the international community alike, criticism and reflection began to emerge with regard to the alchemist like stock market new rich and similar money worshippers, with calls for greater discipline growing in size and volume. There was a shift in economic activity from software to the hardware-driven real economy, with the need emerging for a major event to justify the mounting of swift action to quell the rising prominence of Saddam Hussein. We can ask the question of who was more qualified to rise to this stiff challenge ? Bush, the Republican cowboy with the proverbial six-gun strapped to his hip, or Gore, the Democratic elite intellectual who could be expected to largely follow in the footsteps of the Clinton policies? In my view, Americans who selected Gore as their preferred next President were mistaken in their choice. For this reason, therefore, Bush emerged victorious as a result of an insurance policy taken out to ensure the interests of America and the world, and not at the hands of the American people per say.

The impact of the collapse of the IT bubble in the U.S. clearly surfaced in stock prices from April 2001, nearly half a year after the November 2000 Presidential Election. This time around, however, the threat of the collapse of the U.S. financial system (a leading software sector) as a result of the subprime loan crisis (the collapse of the housing bubble) has occurred long before the next Presidential runoff this November. The U.S. economy is already in a situation in which it must further shift its focus to the military-industrial complex and other hardware sectors. After more than five years, some 150,000 U.S. troops stationed in the Middle East remain bogged down there and unable to move, during which time anti-American military might in Iran and other parts of the Middle East has continued to grow. Israeli patience is also being stretched to dangerously thin levels.

Against this backdrop, the United States must take the following steps: (1) On the economic front, it must transform its military-industrial complex, the premier hardware industry exerting the greatest ramifications on other sectors, into its economic engine. (2) In the Middle East, it must vigorously strengthen its military supremacy.

Right now, American voters appear bent on electing Democrat Barack Obama as the next President. Is he the right man for the job? I must personally conclude that a candidate demanding the withdrawal of troops from Iraq cannot possibly possess any real understanding of the true nature of America’s “manifest destiny.” As the fall election approaches, I can only hope that there will be no need for further use of the type of insurance policy that tends to leave feelings of uneasiness and guilt in its wake.