A Real Crisis Looms, But World Looks Other Way

For President Bill Clinton, and the world, the stakes have never been higher.

With financial markets trembling around the world, last week Clinton gave what he hopes will be remembered as the most important speech of his career at the Council on Foreign Relations in New York. As a blue-chip audience, including David Rockefeller, Pete Peterson and George Soros, hung on every word, Clinton called the international economic crisis “the biggest financial challenge facing the United States in half a century.” The crisis, he went on to say, presents “a stark challenge not only to economic freedom, but if unaddressed, a challenge that could stem the rising tide of political liberty as well.”

This is more than an economic crisis, the president warned. It does not just imperil the prosperity of people overseas, or even the prosperity of the American people. By undermining emerging democracies from South Africa to Russia, the crisis threatens to polarize world politics and undo the peace. Its threat to the American people is greater than any number of terrorist militias or rogue states.

He’s right, and it’s high time the president of the United States began the long, difficult process of educating the American people to the nature of the threat.

The trouble is, coming at this dreadful nadir of public confidence in his character and motives, Clinton is less well positioned to use the bully pulpit than any modern president, save Richard M. Nixon. “Wag the Dog,” muttered skeptics when the United States bombed suspected terrorist sites in Sudan and Afghanistan--and that was before the release of the Starr report.

Now Clinton is trying to summon a greater sense of national urgency and purpose about a threat that is more diffuse and difficult to spot. Embassy blowups make better TV than stock-market crashes in overseas markets. It’s easy for cynics--and, when it comes to Clinton, they aren’t in short supply these days--to charge that a desperate president is trying to manufacture a foreign crisis simply to save his political skin.

Yet, if Clinton has any political authority left, it flows from the popular faith in his economic skills. Why, despite the sleaziest scandal in the history of the U.S. presidency, do his poll ratings remain at stratospheric levels that other presidents only dreamed of?

It’s the economy, stupid. Roughly 75% of those polled told the Wall Street Journal last week that they approved of the job Clinton is doing on the economy--and why not? The budget is balanced, unemployment and inflation are at their lowest levels in a generation and wages are rising twice as fast as prices.

Now Clinton is crying wolf about the international economy, hoping that public faith in his economic leadership will make people think twice about impeachment. It’s what Franklin D. Roosevelt did in 1940: using an international crisis to prolong his hold on the White House. “Wolf! Wolf!” Roosevelt said, in effect, as the German blitzkrieg rolled across Europe. “Give me a third term because only I can be trusted to deal with the crisis.”

But the global crisis means more to Clinton than a simple chance to escape independent counsel Kenneth W. Starr’s perjury trap. Even before the Monica S. Lewinsky matter threatened to drive his presidency into shame and disgrace, Clinton was always a leader in search of a legacy. The United States has been fat, dumb and happy in the Clinton years--good news for the people, but bad news for a president who wants his own chapter in the history books.

Where would Abraham Lincoln have been without the Civil War, Clinton reportedly has mused to his friends. Roosevelt had the Depression and World War II. John F. Kennedy had the Cuban missile crisis. Even George Bush had his Gulf War.

Now, with his presidency in danger, Clinton has found his issue, maybe his hour. Financiers who once swore by deregulated capital markets beg for governments to intervene. A rising worldwide chorus urges reform of the International Monetary Fund and the World Bank. Hundreds of millions of people in Russia, Asia and Latin America call on world leaders to do something about the terrible, unexplained crisis that in some cases has wiped out a generation of economic progress in six nightmarish months.

If Clinton can mobilize an international consensus to reform the IMF and the World Bank, ease interest rates worldwide and come to the rescue of Asian and Latin American economies, then he will leave office hailed as a hero by a grateful world, and he will be remembered as one of the most important American presidents of the century. Starr and his congressional friends will be remembered, if at all, as shortsighted critics who nipped at the heels of a visionary leader busy saving global capitalism in its hour of trial.

That’s the good news. The bad news is that Clinton, like any president, has only limited authority when it comes to the international economy. Federal Reserve Chairman Alan Greenspan sets interests rates in the United States, not Clinton. Germany’s Bundesbank is even more independent than the Fed, and Japan’s divided ruling elite seems incapable of constructive action no matter what Washington says or does.

So the real measure of Clinton’s challenge is this: He must use the White House bully pulpit not only to convince a skeptical U.S. public that the international economic crisis is a real danger, not a wag-the-dog distraction; he also must galvanize international public opinion to unite Europe and Japan behind a program for global economic change.

We should all wish him well. As a planet teeming with nuclear weapons hurtles toward an economic abyss, the United States and the world need strong leadership more than at any time since Roosevelt confronted the twin menaces of Nazi Germany and imperial Japan.*