A New Definition of National Defense

Maybe this Memorial Day, Americans should no longer wear red poppies for the war dead alone--for casualties of Gettysburg, Flan ders, Iwo Jima or the Tet offensive. Maybe it’s a good idea to begin wearing red poppies for our new casualties: dead industries, plundered real estate, captured corporations, stolen technologies, surrendered markets, loss of the U.S. global economic hegemony won on earlier 20th-Century battlefields. This is the new challenge of American patriotism, and it’s redefining the 1988 foreign-policy debate--and reopening the 1968-1984 verdict on which party keeps America strong. That’s no longer so clear, to George Bush’s potential November jeopardy.

Let no one doubt that this autumn’s election will pivot on different psychologies than the choice of the last four Presidents--three of them Republicans committed to a military and geostrategic definition of U.S. strength and security. The GOP’s definition of patriotism and strength--forged in opposition to Vietnam-era defeatism and bolstered by the 1979-80 Iranian hostages embarrassment--is losing relevance. The public is beginning to rethink U.S. vulnerability--and the remedies needed--in economic rather than military terms. Opinion polls paint that shift starkly. Jobs and domestic prosperity, not global geopolitics, should be the first concern of U.S. foreign policy. The perils of foreign drugs, foreign trade and foreign investment have overtaken the threat of foreign tanks and nuclear missiles. By 2-1 and 3-1 majorities, U.S. citizens rate economic power over military power and see economic competitors as a potentially greater threat than military adversaries. A controversial new sampling by the Boston polling firm, Marttila & Kiley, even reports that a majority of voters see Japan as a greater threat than the Soviet Union.

This may constitute the watershed mood change of the late 1980s. The electorate wants U.S. patriotism to climb out of its jungle fatigues and start dealing with the new threats: Colombian drug dealers, illegal immigrant gangsters from Jamaica, East Asian consumer electronics copycats, European corporate raiders and foreign investors gobbling up U.S. factories and real estate with the cheap dollars they’ve made from financing the U.S. international debt. The issues are falling into place. Stop invading banana republics, voters are saying, and start defending Silicon Valley, the beach at Waikiki and U.S. neighborhoods threatened by drug trafficking. Begin regulating or at least monitoring foreign investment in the United States. Insist that increasingly rich Europe and Japan pay for the same portion of Western defense burdens that they represent of Western commerce and wealth (4-1 majorities agree with that one, too).

If the new shape of U.S. public opinion is startling, the new shape of U.S. politics could follow suit. Since the Republican surge in presidential politics began in 1968, the GOP has been the patriotic party in U.S. politics. Let Democratic Presidents or nominees propose crawling on their knees to Hanoi or fumble ineffectively as Middle East ayatollahs take U.S. embassies hostage. Republicans watched John Wayne movies and enjoyed 2-1 opinion-poll majorities as the party preferred to keep America strong.

This hitherto winning equation is now at risk as the politics of patriotism shifts from largely military and diplomatic yardsticks to economic ones. Bush, the expected GOP nominee, said in a speech about a month ago that foreign policy would be the big issue because the economy is so strong. That could be a double-barrelled misconception. The economy is becoming a foreign-policy issue and vice versa.

By immediate yardsticks the economy is pretty good, at least for many people. But the public has real undercurrents of doubt, particularly about the way Washington’s credit-card economics of the last five or six years have shifted more and more control over U.S. prosperity to foreign investors and central banks. They have lent us much of the money to pay for the deficit-financed tax cuts and defense buildup of the 1980s. Now they are calling in their chits.

This controversial new leverage is what’s replacing the slowly declining merchandise trade deficit as the 1988 debate fulcrum of economic nationalism. After peaking at $170 billion last year, the U.S. trade deficit should recede to $150 billion this year and $120 billion to $130 billion in 1989. What’s taking its place on the political fever chart is the soaring triple burden of paying interest on the borrowed money, seeing huge chunks of U.S. business and real estate snatched up by foreigners and watching the outflow of dollars as profits and rents of property now owned by British, German or Japanese investors fly to faraway lands.

Yet the vortex of public nervousness is a vague but real sense that Americans are losing control of the U.S. economy. Foreigners are taking up the reins in everything from raids on U.S. corporations to decisions about whether to buy U.S. bonds and at what interest rates. The decision by the Reagan Administration to borrow so heavily and make us the world’s biggest debtor is unprecedented for a leading economic power in modern times. Prof. Rodney W. Eldridge, a George Washington University expert on international finance, says recent U.S. policies mark the first time in history that “an advanced industrialized nation has gone back to debtor status in peacetime.”

Meanwhile, signs of declining U.S. control of our own economy pop up everywhere. One little-publicized phenomenon is the rapid emergence of a large and powerful overseas investors’ lobby in Washington. Up to 40 foreign corporations now have lobbying offices in the U.S. capital. Two national trade organizations have been formed to represent the U.S. subsidiaries of foreign manufacturers. The last six months have even seen the establishment of two Washington lobbies--the Assn. of Foreign Investors in America and the Assn. of Foreign Investors in Real Estate--to represent overseas financial interests in the U.S. decision-making process.

The second related dimension is that a number of economists believe foreign central banks in such countries as West Germany and Japan are spending billions to support the dollar during the election year and maintain the Republicans in power so they can continue current U.S. free trade and free investment policies. Large numbers of ex-Reagan Administration officials have emerged as counselors for Japanese financial interests. Indeed, David Hale, chief economist of Chicago-based Kemper Financial Services, has gone so far as to characterize the Bank of Japan as an unregistered Republican political action committee.

Relatively few Americans are familiar with these specifics but the public does have an approximate sense of the overall problem and a growing fear of its potential consequences. From my perspective as a former Republican strategist involved in theorizing the emergence of the GOP’s new presidential coalition 20 years ago, the politics of all this seems as precarious as the economics. Like the Democrats of the 1960s, the GOP is beginning to trespass on the patriotism of Middle America. Two decades ago, the Democrats let themselves be weaned away from upholding the U.S. military by abstract liberal theories of social justice, campus progressivism and Third World self-determination. Middle America and the patriotism issue migrated to the Republican column in presidential voting.

Now the Republicans, in turn, are caught up in philosophic abstractions--concepts such as free trade and unrestrained capital movement--that seem to lack patriotism, to salute foreign flags and to tolerate, if not encourage, various forms of overseas aggrandizement. Democrats, being less capitalistic, are inclined to be more aggressive economic nationalists. Exit polls taken during April and May Democratic primaries suggest that 60% to 80% of the Democrats--many of them blue-collar workers--who voted for Reagan in 1984 are backing Massachusetts Gov. Michael S. Dukakis in 1988. Patriotism is changing political gears, and unless Republicans wise up, it may be changing parties.