America has suffered a profound loss of international influence and respect over the course of the Bush administration. While most of the attention has focused on the administration’s flawed security strategy, recent events demonstrate that Bush’s economic agenda has been similarly disastrous for America’s role in the world. The administration’s tax cutting for the wealthy combined with big spending has left us with dangerous levels of debt and the highest level of inequality since the 1920s. And the administration’s failure to impose even basic regulations on the subprime industry has encouraged (although not caused) turmoil on Wall Street.

What is most alarming about Bush’s economic blunders is that he appears to be clueless to the threat our economic vulnerability poses to our sovereignty. Over the last few weeks, sovereign wealth funds (i.e. foreign governments by another name) bought up major stakes (i.e. 5 to 9.9 percent) in the some of the biggest banks on Wall Street such as Citigroup, UBS, Morgan Stanley, and now Merrill Lynch. Bush’s response to foreign governments (and primarily non-democratic governments at that) buying up huge shares of our biggest banks was hardly a response at all. “I’m fine with capital coming in from overseas to help bolster financial institutions,” he said. “What would be a problem is to say we’re not going to accept foreign capital, or we’re not going to open markets, or we’ve become protectionists.”

I just frankly do not understand Bush’s thinking here. It seems to me one of the few times protectionism is appropriate is when a non-democratic government is buying up major ownership rights of companies that a huge number of Americans depend on. The reason is simple: capitalism depends on individuals seeking profit and we cannot be sure of the motives of foreign governments, who may eventually use their stake for political interests. The possibility of political motives at least merits some basic review process, rather than a blind endorsement from the President.

On a broader level, it is striking that Bush does not see a sovereignty issue here considering he sees sovereignty threats in so many other areas. In Bush’s mind, joining a basic international environmental agreement or even abiding by the clear language of the Geneva Conventions is a major impediment to our sovereignty. Yet, having non-democratic countries buying influence in our banking system is a no-brainer for him. I think he should reverse his thinking. Working with other countries to solve common challenges like climate change and human rights makes us stronger as a country. Running budget deficits and encouraging economic turmoil makes us weaker. It is ironic that a President who campaigned on strength may be remembered as the leader who most contributed to our country’s weakness.

Related posts:

1. U.S. Standing in the World
2. Richardson Weighs in on Mideast
3. The Freedom Agenda R.I.P.? Part IV
4. The Freedom Agenda R.I.P.? Part II
5. Can We Cut the Pentagon’s Budget? Should We?