Last Updated: 2008/12/05 21:19

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Inside America

U.S. Political Report

(Return to Japanese translation.)

George R. Packard
President, International University of Japan;
Director of the Reischauer Center for East Asian Studies at the School of Advanced International Studies (SAIS), Johns Hopkins University, President, U.S.-Japan Foundation

George R. Packard was dean of SAIS from 1979 to 1993 and is now director of the Edwin O. Reischauer Center for East Asian Studies as well as professor of East Asian studies at the school. He is also president of the International University of Japan. From 1965 to 1967, he was chief diplomatic correspondent for Newsweek. Prior to that, he served as special assistant to U.S. Ambassador to Japan Edwin O. Reischauer. In March of 1998, he was appointed president of the U.S.-Japan Foundation.

Packard Report - Jan. 1998

As the New Year rolled in, the American public has never been less interested in politics and government. Media stars in Washington who commanded enormous fees for offering "insider" scoops to audiences around the country are no longer hot. Polls show that Americans have either given up on trying to change Washington, don't care, or are too busy making money and enjoying this unprecedented period of prosperity.

Against this background, the Clinton Administration faces four serious issues, all of which may come to a head within the next two to three months:
  1. Asia's economic troubles could burst the American bubble. Pessimists warn that the wave of currency crises and devaluations that began in Thailand last summer could lead to a situation analogous to the oil shocks of the 1970's.

    Optimists counter that the U.S. economy is still highly insular: only 11% of GDP comes from exports, and less than 10% of exports go to the most troubled Asian nations. They argue that cheaper imports of good from Asia will hold down inflation and keep interest rates low.

    Pessimists, on the other hand, fear that a flood of cheap imports from Asia will drive the American trade deficit to new heights and cause Congress to move away from the liberal trade policies of recent years. The deficit numbers will be announced in mid February: look for a lot of grumbling from Capitol Hill, directed mostly at Japan and China.

  2. Iraq could heat up a crisis any time. Saddam Hussein has an interest in keeping the tension up, and as reported last time, the U.S. is hard-pressed to know how to deal with his threat of using biological or chemical weapons. President Clinton may be called upon to take sterner measures next time. One hopeful sign: a possible step toward rapprochement with Iran. There is a growing consensus here that a wise policy is to make friends with your enemy's enemy. The new President of Iran appears interested.

  3. Paula Jones, again. The American media will create huge headlines on and after January 17, when Paula Jones is scheduled to actually enter the White House and confront the President directly when her lawyers take his deposition in the famous sexual harassment case. Though the media will not be present, the testimony will eventually leak out and be made public, and this can only hurt the President, whatever the validity of her charges may be.

  4. The Budget Battle. Faced with the possibility of a balanced budget this year, lawmakers are once again dreaming up new ways to spend money and/or cut taxes. Yet every mainstream economist and most Americans understand that this would be insanity: what is needed is a plan to reduce the gigantic national debt and to head off bankruptcy of the social security and Medicare systems before the baby boomer generation reaches retirement age in about 12 years. As Robert Reischauer of the Brookings Institution wrote in the New York Times of January 9, "The budget surpluses projected for the next decade are an illusion." Watch for a major battle over this issue as Congressmen seek to enhance their popularity in this midterm election year.

  5. Japan. Never has there been more confusion than now about what the Japanese Government is up to. Even Japan specialists are wondering why the Hashimoto Cabinet, in its own self-interest, has still not taken the decisive steps needed to clean up the banking crisis, stimulate domestic demand and help stabilize the economies of nations like Thailand, Indonesia and Korea where Japan stands to lose so much.
As mentioned above, these are all "inside the Beltway" concerns, which have not yet reached the mainstream America.

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