Obama’s foreign policy black swans

Being a neurotic control freak has its upsides, particularly if you are a senior American political consultant. Both David Axelrod and David Plouffe – the svengalis behind President Obama’s thrilling 2008 run to the White House – would cheerfully concede the point. It is all about molding a campaign, putting a headlock around the general narrative of the race and making especially sure that no one and nothing slips out of control and alters the basic trajectory of the contest. As such, the far more problematic 2012 presidential contest must keep both men up at night.

With the unappetizing Republican nominating preliminary bout out of the way, the contours of the two-man dash to the finish line are now clear. Obama maintains a small national lead of two points or less, well within the margin of error. While a state-by-state assessment has him in better shape (with more ways to reach the needed 270 electoral votes than Mitt Romney possesses), the outcome is not yet a foregone conclusion. Florida, Ohio, Colorado, Virginia, and North Carolina, are all still very much in play.

Obama will raise a ton of money, but will fall short of the overly ambitious $1 billion target the campaign set for itself. However, adding together his own direct contributions and Super PAC donations, Romney will be in the President’s league in terms of fund raising. Above all, a dodgy economy – characterized by one of the weakest recoveries on record – will form the centerpiece of the contest, along with the almost $5 trillion in additional debt the Obama White House has added to the national tab. It’s going to be ugly, and its going to be close.

But that is not what secretly torments the control freaks ably running the Obama campaign. Instead they wonder: Given everything outlined, the President should still win by a nose, with everything else being equal. But since when has everything else been equal? History continues even during presidential campaigns, including in terms of foreign policy, often considered an electoral sideshow in the United States.

And here almost all the news is bad, only having the potential to make things worse for the President. As such, the White House wants the next few months to fly by, with nothing much happening. But two foreign policy black swans have now glided clearly into view, either of which could decisively doom the Obama campaign. Worse, the President’s team has almost no control over either of them and is instead at their mercy.

Europe hits the iceberg
According to sources inside the Obama campaign, Europe can just about muddle through the next few months, but only if everything goes right. To put it mildly, given the European elite’s dreadful policy track record and glacial pace at dealing with the euro crisis, it would seem the Obama team is prizing hope over experience; the whole festering mess could so easily turn septic. If the European recession becomes a depression, if the partial collapse of the euro becomes another Lehman moment, even a partially shielded America will be knocked enough off course – given its own weak economic recovery to begin with. This would doom Obama to a single term.

Behind it all, there is undoubted donor fatigue as well as colony fatigue in Europe. Far from deepening ties amongst European nations, the euro crisis has strained relations in a way not seen over the post-war era. Germans (and I live there and hear this every day) are tired of supplying the credit card for others’ parties and lack of fiscal rigor; they don’t want to pay for Greeks who retire in their 50s (Germans continue plodding along in work until they are 67), many of whom don’t pay their taxes. In return, southern European states don’t want to be arrogantly told what to do by a Berlin who seems as inflexible about austerity uber alles as it is oblivious to the real sufferings of the people. There is no doubt the debtor states borrowed too much. However there is also no doubt that German and French banks lent them too much. In other words, there are plenty of villains here beyond Germany’s comforting and simplistic narrative of events.

Because of past mishandlings, the euro crisis is now like dealing with an unexploded bomb; one wrong move and the whole thing could blow sky high. The latest June 1 poll puts hard left Syriza ahead in the Greek election. Were this rejectionist party (regarding the bailouts) to win and form a government, their fairy tale of a substantial bailout renegotiation with the Germans would within days be exposed for the fantasy it is. Greece would rather quickly be booted from the currency.

Far more important Spain – struggling with 10-year bond yields at an almost unsustainable 6.7% – could well be forced to ask for a bailout in the near term, as its bad banking debt runs to at least 180 billion euros. If Spain, the fourth largest economy in the eurozone, is forced to go cap in hand to the EU (ie the Germans) the euro project itself will be called into existential question. The thing hangs by a thread, and there is precious little Obama or an ineffective Treasury Secretary Tim Geithner (he always looks as if he’s stifling a scream when he leaves European meetings, making him less than popular) can do.

Iran may well come to a head
As if this were not enough (and contrary to conventional pundit wisdom at present), an Isreali strike on Iran’s nuclear sites in September cannot be ruled out. Knowing that Obama could, once re-elected, afford to be far tougher with his government over this issue – demanding that the sanctions approach be given real time – Prime Minister Netanyahu must be tempted to strike in the Autumn, ahead of the American election, while he still has the military ability to do so. At present, Israel worries with reason that the Fordo reprocessing plant (buried more than 290 feet below a mountain outside the holy city of Qom) may soon be impregnable to Israeli bunker busters. At which point Israel would have to count on the United States (with its superior munitions) to act in its place. But it is not part of Israel’s strategic culture to subcontract its existential survival out to any other country, even an ally like America.

Worse, from the Israeli point of view, despite all the kind words the US and Israel have for one another, their objectives fundamentally diverge over Iran. For Obama the red line is Iran acquiring nuclear weapons, for Netanyahu it is Tehran having the capacity to produce nuclear weapons; there is a canyon between these two positions. Since the two famously do not get along (Netanyahu much prefers Romney, who has made almost-unquestioned support for Israel a major plank of his putative foreign policy), the Israeli Prime Minister will not shed tears if his actions cause Obama’s defeat in November. From his perspective that would just amount to an added bonus.

For there is little doubt that this second foreign policy black swan could also easily derail the President’s plans. Triggered by the potential closure of the Strait of Hormuz, a spike in oil prices and the global economic uncertainty unleashed by such an attack would almost inevitably push a very fragile Western world toward calamity. Without question, enough economic damage would be done to put paid to the White House’s chance for a second term.

The platitude that, even more than usual, this presidential campaign will be about the economy, the economy, the economy, is certainly true. However, when other, extraneous issues directly affect America’s domestic well being they become central and pivotal. This is how foreign policy has always played out in terms of American politics; as these possible black swan crises indicate, this remains true today. What is excruciating about all this for the Obama campaign team is the massive overall structural change that has taken place in the world, which has far more quickly than anyone imagined, morphed from unipolarity into multipolarity. Like President Obama, America is to a far larger extent at the mercy of forces it no longer controls.