06/01/2020 No. 156
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The Legacy of President Obama
By Yung-Sheng Cha
July 1, 2015

There are less than two years left in the Obama presidency. People have begun to talk about the legacy of the Obama Administration. It is not unusual to consider a president to be a lame-duck president during the last two years of his presidency, and no major accomplishments are expected. This is especially true for President Obama in view of the fact that both the Senate and the House are controlled by the Republican Party.


It is fairly easy to see the great domestic achievements of the Obama administration. First, the Obama administration saved our economy from depression caused by the great recession of 2008. Second, Obamacare (or affordable healthcare) changed a large part of the healthcare system in this country. Both of these policies will have long-lasting impacts on the lives of a great many people. On the other hand, President Obama was unable to move gun-control legislation, comprehensive immigration reform, and tax reform through Congress.


On foreign policy, President Obama is credited to end the wars in Iraq and Afghanistan. A few politicians in the Republican Party claim that the current chaotic situation in Iraq will be the legacy of the Obama administration. But the majority of Americans do not share this view because they know full well that Iraq is the legacy of George W. Bush. The Iraq war totally defined the Bush administration's foreign policy and it was one of the main reasons that Obama was elected in 2008. Similarly, the financial crisis in 2008, which President Obama inherited from the previous administration, provided an opportunity for him to establish this particular legacy domestically.


Much has happened in the international arena since Obama became president. The so-called "Arab Spring", which started in Tunisia and spread to Egypt, Libya, and Syria, did not turn out to be what the liberal democrats expected. In fact, it is completely the opposite of what was expected by the West and American media. The "Arab Spring" did not bring democracy to these countries, instead it only brought chaos. There is really not much the U. S. can do to change it and the decisions by the Obama Administration not to send ground troops there were prudent.


The recent events in Ukraine and the standoff with Russia are somewhat alarming. But the conflicts between NATO (European Union and the U. S.) and Russia are not new. They are leftovers from the cold war era. Ever since the breakup of the former Soviet Union, NATO has been trying to incorporate the satellite countries of the former Warsaw Pact. Russia is, of course, against it. Russia was in bad shape economically in 1990 when the former Soviet Union broke up. Now (twenty years later) the Russian economy has improved, mainly due to the four-fold increase in the price of oil, it wants to reassert itself and return to its glorious past as a world power. The conflicts in Ukraine between NATO and Russia will continue for an indefinite period of time.


We might note that the conflicts in the Middle East (including the conflict between the Arabs and the Israelis, between the Shiites and the Sunnis) and the conflicts between NATO and Russia always existed. It is not likely that any American president can change the situation in a significant way in the foreseeable future. However, there is one important challenge in foreign policy in which the Obama Administration might be able to achieve some success during the remaining period of his Presidency. It is preventing Iran from developing and acquiring nuclear weapons. But the outcome is not certain and depends a great deal on whether Congress will view it favorably or not. With the Republicans in control of Congress, they may not wish to give Obama the credit for achieving and closing the deal between Iran and the U. S. But the alternative of military action against Iran is probably not a path that the majority of Americans will choose. 


There is, however, one major change in foreign policy that the Obama Administration announced, which will impact the world for generations to come. It is the relatively new policy of a "pivot to Asia" which was announced near the end of his first term in 2011. The nature of "pivot to Asia" is to shift military emphasis from Middle East and Europe towards Asia. As a matter of fact, it is intended to contain China.  The U. S. is trying to form or enhance military alliances with Japan, Philippines, Australia, Vietnam, as well as India, in order to restrict China's influence in Asia. Since the announcement of the "pivot to Asia", tensions have escalated in the East and South China Seas.


Originally, the U. S. wanted to engage China economically because it is still of vital importance to the U. S. Later on the U. S. changed the word "pivot" to "rebalance" which also included economic issues such as finance and trade. Two recent events indicated clearly the U. S. intention to treat China as a rival on the economic front. The first is the formation of the Asian Infrastructure Investment Bank (AIIB) which is spearheaded by China. There are definite needs in Asia to develop the infrastructure there. The U. S. not only did not join the AIIB but also unsuccessfully tried to persuade other countries (especially the Western Europe countries) not to participate. The formation and operation of the AIIB will give China more influence in international finance and increase the exposure of the Chinese currency (RMB) in international trade which the U. S. is trying to prevent.


The second is the formation of the Trans-Pacific Partnership (TPP) which involves a dozen countries on both sides of the Pacific (China being excluded), and is spearheaded by the Obama Administration. The proponents of the TPP (President Obama and the Republicans in the Senate) say it will increase the U. S. exports and is good for business, particularly for large corporations which export to other countries. But increased exports do not always translate into more jobs and higher salaries for average workers. That is why unions and average workers (and therefore the Democrats in the Senate) are against the TPP.  A recent article in Time magazine entitled "The Trans-Pacific Partnership could help the U. S. counter China in Asia", by Ian Bremmer, showed that by 2025 the projected GDP gain for the U. S. is only 0.38% higher with the TPP than without it. Why is Obama trying very hard to push the TPP through Congress even though the gain in GDP is minimal for the U. S.? It is because the TPP fits in the overall strategy of the policy of rebalancing towards Asia and serves the purpose of containing China both militarily and economically. As Ian Bremmer puts it clearly in his article, "the Trans-Pacific Partnership is much more than just a trade deal. It is the foundation for an intelligent reorientation of U. S. foreign policy, one that will help revitalize the entire global economy and reinforce security ties with Asian countries fearful of China's growing regional dominance. It remains the centerpiece of President Obama's long-delayed "pivot to Asia", a smart plan that could extend American influence in East and Southeast Asia for many years to come".  In other words, the objective of the TPP is to maintain U. S. hegemony in East and Southeast Asia. Whether the plan is smart or intelligent remains to be seen. 


This policy to "rebalance to Asia" will have a profound influence on the world for a long time to come. It is well known that the most important accomplishment of the Nixon administration was the engagement of China, which started in 1972. This policy was followed by all the Presidents after Nixon (Ford, Carter, Reagan, Bush, Clinton, Bush Jr.), including the first term of the Obama administration. This policy is indeed the legacy of Nixon, which moved China farther away from the Soviet Union and contributed to the eventual breakup of the latter in 1990. However, the unintended consequence was the rapid growth and development of China for the last 35 years. Somehow the policy makers in the Obama Administration decided that China must be contained militarily and restricted economically, otherwise it would challenge the hegemony of the U. S. in the western Pacific. This policy is a clear change and turnaround from the previous eight administrations (including the first Obama administration).


Will the U. S. be able to contain China? The mighty U. S. military certainly is superior to that of China. The Chinese military, particularly the Navy and the Air Force, will not be able to catch up with and match the U. S. for at least another ten years. But ten years from now, the nominal GDP of China will probably become close to that of the U. S. Right now China's GDP is about 60% of that of the U. S. A conservative estimate is that twenty years from now, the Chinese economy will most likely surpass that of the U. S. and become the largest in the world, irrespective of whether the "pivot to Asia" is successful or not.


The U. S. policy on China appears to be that it wants to have it both ways. It still wants to trade with China so that big corporations can profit from it and so that inexpensive goods imported from China can keep the inflation low in the U. S. The U. S. also wants China to continue buying U. S. treasure bonds to finance its deficit (currently China owns more than one trillion-dollar worth of U. S. treasury bonds). On the other hand, the U. S. does not want to have a rich and powerful China which can threaten the hegemony of the U. S. position in the western Pacific. It is a gamble. If this policy does not work well, it can backfire and move China farther away.  How long the U. S. can maintain this strange balance is quite uncertain.


The current trend of China/US relations is not encouraging. First, China and Russia are moving closer together because of the U. S. policy on Ukraine in Europe and the policy to rebalance in Asia. A lot will also depend on how the majority of Chinese view the U. S. Starting when Mao and the Communists took over China in 1949 there was a period of about 30 years during which both sides considered the other to be in the enemy camp. There was practically no contact between the two countries. The Nixon Administration broke the ice, followed by the establishment of formal diplomatic relations by the Carter Administration in 1979; the relationship began to warm. The next 30 years (from 1980 to 2010) was the friendliest period between the two countries. Trade and business flourished during this period and most Chinese viewed the U. S. favorably. It was truly a win-win situation between the two countries. But the opinions in China may begin to shift after the policy of "pivot to Asia" was announced. Conflicts between the two countries are rising both militarily and economically. Currently the conflicts are still manageable. But the policy to "rebalance to Asia" announced by the Obama administration is clearly a reversal of past U. S. policy, just like the reversal of the policy towards China by Nixon in 1972. The difference is that Nixon moved China closer to the U. S. while Obama is driving China away from the U. S. More importantly, when Nixon approached China in 1972, China was a third world country and its GDP was quite small (less than $200 billion). China has progressed a great deal over the last thirty years and has an annual GDP of $10 trillion.


The U. S. policy of placing more emphasis on Asia is a move in the right direction because the twenty-first century is the Asian century. China is the most important country in Asia. Washington should acknowledge that maintaining hegemony in the western Pacific is not essential to America’s security. Obama should try to pull China towards the U. S. instead of driving China away. The U. S. should adopt a China policy that is win-win for both countries. For example, the U. S. can invite China to join the TPP instead of excluding her. If China joins the TPP every country will gain, including the U. S. and China, and it is a win-win situation. Washington should actively encourage negotiation for peaceful settlement of disputed areas in South and East Asia, instead of taking sides and inciting tensions among various countries in the region. The current policy to "rebalance to Asia" appears to be doing the opposite. It seems that the U. S. is deliberately trying to contain and isolate China. Consequently China will increasingly view the U. S. as a rival and potential adversary. If this policy continues in its present form, the relationship between the two countries will worsen. Let us hope that ten years from now, we will not see a debate again in the U. S. on "Who lost China?" If that is the case, it will certainly be the most important legacy of the Obama Administration.



Y. S. Cha

Darien, Illinois

May, 2015

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Yung-Sheng Cha graduated from the Mechanical Engineering Department of National Taiwan University in 1967. He received his MS and Ph.D. degrees in Mechanical Engineering from Lehigh University in 1970 and 1973, respectively. He was employed by Argonne National Laboratory in 1974 until his retirement in 2006. While at Argonne, his research focus was mainly on different energy systems. Dr. Cha is a U. S. citizen.
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