where now for the united states after the election? lse transcript.… · in conjunction with lse...

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Where now for the United States after the Election? 7 th , November, 2008, London Carnegie Europe In conjunction with LSE IDEAS Where now for the United States after the Election? 7 th of November, 2008 PANELLISTS: Jessica T. Mathews President, Carnegie Endowment for International Peace Professor Michael Cox London School of Economics and Political Sciences; Co-director of LSE IDEAS Bob Singh Fellow, The Renaissance Society of America (RSA) 1

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Page 1: Where now for the United States after the Election? LSE Transcript.… · In conjunction with LSE IDEAS . Where now for the United States after . the Election? 7th of November, 2008

Where now for the United States after the Election? 7th, November, 2008, London Carnegie Europe

In conjunction with LSE IDEAS Where now for the United States after

the Election? 7th of November, 2008

PANELLISTS:

Jessica T. Mathews President, Carnegie Endowment for International Peace

Professor Michael Cox

London School of Economics and Political Sciences; Co-director of LSE IDEAS

Bob Singh

Fellow, The Renaissance Society of America (RSA)

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Where now for the United States after the Election? 7th, November, 2008, London Carnegie Europe

CHAIR: Good evening ladies and gentlemen. Welcome to this particular session, which I hope will be a very fruitful one. Perhaps I may begin by telling you an inappropriate story; it’s about a fifth grade school teacher who asks the class who they are because it’s the first time that she’s actually met them. And she says, well, go round the class if you may and I’ll tell you who I am and what I do, and what my husband does, and then we’ll go round the class; you introduce yourselves and, if your mom and your dad are working, please say what they’re doing? And this is all going splendidly well until they come across a little boy called Johnny, who clearly doesn’t want to be present at this experience but peer pressure forces him to conform and so he says, well, actually I don’t have a mom but I have a dad; he’s an exotic dancer in a gay cabaret. Slight moment of silence there. The teacher goes across the room, finishes the discussion, sets the class a reading assignment, then the school bell goes, they come along and they leave and she asks Johnny to come to her desk and she says, ‘Johnny, is this really what your Dad does?’ And he looks at her with a certain disdain and says, of course not. No, he works for the Kerry campaign; I was just too embarrassed to tell the other kids. Now, the two presidential candidates who stood for high office a few weeks ago were not John Kerry; they were standing on a different platform. ‘We’re different.’ John Kerry was definitely establishment. And, whatever you think of the candidates, they were claiming to be non-establishment; in other words, presidential candidates for the 21st Century, and we shall see, quite soon, whether Barack Obama is establishment or not. Whether he’s going to be another FDR, as some people think, because we’re in a financial and economic crisis which some have compared, rightly or wrongly, with 1929, 1932. Whether he’s going to be another Jimmy Carter, who also got over 50% of the popular vote, the last Democratic president to do that, or whether he’s going be a candidate who’s going to be overwhelmed by events like, perhaps, the majority of American presidents, in one way or another, except we can’t remember the events, therefore we can’t remember the presidents. This is a key election because the challenges that face the next president of the United States are probably historically defining. I hate this idea when you see, particularly in the Sun newspaper, this is an historical moment, since I’m not quite sure that the Sun newspaper knows an historical moment if it’s staring it in the face. But the fact is that this is an historical moment; it’s the end of the unipolar moment. The United States is no longer a unipolar power; it’s sharing power with others. Perhaps it has for some time without knowing it, but it is. Next year will be the first year, in 30 years, in which Japan, Western Europe and the United States will have negative growth for the first time. This is a major challenge to the West’s position internationally and where it faces itself, and we also have, of course, the question of U.S. leadership, generally, economically; obviously recent events. So, it’s absolutely appropriate, this evening, that we have three panellists who are going to tell us how significant this election is, how important the choices have actually been, how important the candidate who has been chosen. I’ve been in this business for a long time, as have all the panellists, and I have been reading books on the decline of the United States since I first became interested in the United States since the 1960s. Never have I seen an election where the political class of the United States, and the candidate the political class puts forward to the American people, has been more important than this. Because, quite frankly, if the United States is to dock the decline, which we Europeans, of course, in our typical European way feel is inevitable, it is because the political class can do something it can’t do in Europe, which is produce a candidate who can make the inevitable difference.

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Where now for the United States after the Election? 7th, November, 2008, London Carnegie Europe

Can I please introduce the people who will be speaking here - beginning with Jessica Matthews, who served both in the Carter Administration, first of all, in the National Security staff and, secondly, as Deputy Undersecretary of State in the Clinton administration. She’s been on the editorial board of the Washington Post, she has been a co-founder of the World Resources Institute, she’s the President of the Carnegie Endowment for International Peace, which, many of you will know, is one of the leading think tanks in the United States with offices across the world; in Beijing, in Brussels, in Washington, in Moscow and in Beirut, which I didn’t know until this evening. She will speak first. Then we will have one of the panellists; I won’t name him, and one of the other panellists. When I say I won’t name him, he will have been ousted already. Described as a minor national treasure, with the emphasis on minor; indeed, he recognises it himself. That is Professor Mick Cox, about whom I shall say nothing more. And then, there is Professor Bob Singh, who is at Birkbeck; he has been there since 1999. He is a fellow of the Royal Society of Arts, associate fellow of the Institute for the Study of the Americas, the University of London and an honorary fellow of the Foreign Policy Association of New York. They will talk in that order and at the end of it we will throw it open to a question and answer session and we will, depending upon the questions and answers given, particularly the answers, end at around about 7:55. Jessica, if I could ask you to speak now, thank you. JESSICA T. MATHEWS: Thank you. It’s a great pleasure to be here and I must say this is my first time abroad in a very long time, since the election, feeling like I am not representing a country that’s in, at least in Europe, a certain doghouse. It’s quite a different feeling. I wanted to spend a few minutes talking about what this election means domestically because that will, of course, frame what President Obama can do internationally. And then, as I’ve been asked, outline what I think are the key strategic issues; some of the issues where we really don’t know where he’s going to go and some of the key debates that I expect will happen inside his administration, which will be determined by whom he appoints. But the first thing, I think, to say about this election, was that it is at long, and thank God, last the end of the 1960s in the United States. The civil rights movement as we knew it is over, the women’s rights movement is over. I don’t mean to say that these issues are closed; that somehow we’ve magically ended all race and ended all gender discrimination; of course not, but they are fundamentally transformed - both by this election and by what happened earlier with Hillary Clinton. Just to give you a little personal sense of this and how it reverberates in the American political scene; the last time I was in Grant Park, and it was not the election night, was in August of 1968. I worked in the national staff of Gene McCarthy’s presidential campaign and I got a call, in the convention centre, that some of our staff had been attacked by the Chicago police and, one of them in particular, badly injured and was at a police station; and could somebody please try to come and get them out and into a hospital. The scene in Grant Park was the focus of the violence. The anti-war protestors, who had become much more than anti-war protestors; by then it was anti-government. I did go there that night; it was swathed in tear gas and butyric acid, which smells like vomit. There were policeman just knocking their truncheons on the heads of everybody they could get to and lots of people were very badly injured that night. They were taken to police stations and left there with infected skulls. It was on purpose that the Obama campaign chose Grant Park as the scene of this extraordinary occasion on Tuesday night. So, for

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Americans, there is a lot of resonance there and, in the same way that I think a good part of the world sees America very differently now, Americans see America very differently now; great huge swathes of them. I’ll come back to that in a minute. This election is also the end of the Reagan Revolution. Our political eras tend to be about 25 years and this one is right on schedule. We saw it beginning to end in the 2006 election, when the Democrats picked up 30 seats in the House of Representatives, and there was clearly the beginning of a real shift. The Reagan Revolution was also clearly, at that time, beginning to run out of ideas but you had to be really deep into it to see that. Now it’s very evident. For the first time in 30 plus years; more than a generation, you have one party with the working majority in the House, the Senate and the White House. But the core ideas of the Reagan Revolution that, first of all, government is the problem - that idea has really begun to lose steam already on lots of different grounds. The failure of a lot of the privatisation of a lot of different parts of the economy and other things but, certainly, the financial crisis, was a nail in the coffin. I think there is a real question; certainly there was in my mind; whether Obama would have won had it not been for the financial crisis. I think one of my co-panellists is going to talk about that a lot but, the fact is that, having won and having won as powerfully and convincingly as he did, and then having won with the mood that he created, it kind of doesn’t matter and, so, I think there’s a certain paradox there. But, both politically and ideologically the Reagan Revolution is over. Democrats picked up at least six Senate seats; there are a couple that are still too close to call, at least, I think 18 House seats; there are several that are too close to call, and so we have this transformed political agenda. This is, of course, and this is a major point, an enormous temptation to fail for the Democrats; to overreach and fail. And it’s one of the things you most need to be looking for. It was also an end to the accelerating debasement of American politics. We had become so good at nasty politics that it had both increasingly worked and increasingly turned us all off to the political system. Made us hate it, made us cynical about it, and this was part of Obama’s extraordinary gift and insight; that the use of so-called wedge issues of the social issues, whether it was flag-burning or gay marriage, or abortion or whatever, had become so effective, combined with the technology that allowed the Republican party, who were the only ones with money to do this for a long, long time, to slice and dice the electorate in a way that they could do so-called robo-calls; recorded calls and targeted mailings, on the most minute differences; you know, widowed veterans and six or seven categories they could target voters and hit red buttons. It couldn’t be let go of because it worked so well but it had the effect of making turn-out go down, down, down because it was just so unpleasant to hear and listen to and be part of. Obama certainly ran some advertisements, in this campaign, that were not accurate, that were deceptive. He was no angel but he did appeal to our better angels and he did raise the bar in a dramatic way and he did change people’s expectations of what they would expect to hear from their candidates and what, I believe, they will demand to hear. I think you saw that in Senator McCain’s very gracious concession speech; he heard it too. That was a huge part of this enormous turn out and turn around after years of declining turn out. Americans were feeling like how you saw the pictures in South Africa with the first election there, and we did have people standing in line for three or four hours in order to cast a vote because we’d never had turn out like this. Also, we seemed peculiarly unable, for a country that can go to the moon and do everything else, to produce a voting machine that actually works, and enough of them, but nonetheless people did stand in line.

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Fourth, I think this election completely rewrote the book on campaigns - that’s a subject for a different night - Obama took the most old fashioned campaigning; door-to-door, person-to-person, face-to-face, community organising campaigning, and he married it to the internet and produced something brand new. Nobody has ever seen anything like it. He goes to Washington with a database of seven million people, so he’s built a movement, and one of the big unknowns is, how will he use it and can he use it? Can he control it, will it stay together, is it a movement? I don’t think anybody knows the answers to any of those questions. But don’t doubt at all that this was a revolutionary campaign; it was also the best campaign I’ve ever seen and I did work in two presidential campaigns. I’ve never seen anything that comes close. It tells you a great deal about what to expect from him. This man, who, I don’t know whether this part of the campaign came over here or not, who has no executive experience; he built a $600 million corporation with 12,000 employees and he ran it flawlessly and in a way that we’ve never seen. We’ve also never had a first-time campaigner in recent decades. We expect that you have to run once and fail before you can run and win - unless you happen to get lucky like Bill Clinton did, where the third party candidate took away the vote. Bill Clinton got elected with 43% of the vote. Obama got elected with 53% of the vote. There is a Jordan River of difference between that because he comes in with a congress that is looking up to him instead of a congress that’s looking down to him. That’s a world of difference. The one thing that I think it is not, that you might expect it to have been, is I don’t think we have just had a return to traditional liberalism. There was a lot of talk from the Republicans in the campaign that Obama was the most liberal senator in the United States Senate. This comes from one of these vote-counting operations and it means nothing. If anyone wants to know more detail than that I’d be happy to explain it in the Q & A. It means nothing. This is a man whose most profound instincts are centrist. It’s very clear when you talk to him, it’s very clear from his record in the Illinois state senate, it’s less clear because his time in the United States senate was so short, but his instincts, his whole reason for running, are indeed centrist. However, as I said, he’s going to be under enormous pressure from Democrats, who’ve been out of power and unable to execute an agenda for decades, to do that. And whether he can withstand it, I don’t know. So, let’s turn a little bit to the inbox. The first thing to say about the inbox is it’s, without question or even any close competition, the worst inbox that any president has faced since the early 1950s. I think Harry Truman faced a worse one, probably, and Roosevelt did and Lincoln did, but even from that list you get a sense of what neighbourhood it’s in; it is awful. Without question, the first issue is the financial crisis and there, I think, there are two tracks that he will have to follow. One is to deal with the day-to-day reaction to, and attempt to alleviate, what will be a deepening recession. First, I think there are still some bombs to go off in the financial world; not every bad thing that is going to happen has happened yet with the hedge funds and others. So, that is going to require enormous energy from the administration but, at the same time, we have to address, and I believe that the administration intends to, the redesigning of first the national and then the international financial regulatory system. This was the first crisis of globalisation and it has to be seen as that. Everything that we thought about globalisation that was positive now appears in a different light because this was clearly a crisis of globalisation. We are clearly miles behind in terms of understanding what’s going on or

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dealing with it; the realities on the ground. So, they have to go on a two-track process; redesign the system, deal with the crisis at the same time. It’s been done before. Our political system actually works best in crisis; maybe all political systems do but ours definitely does, so that’s a little bit of a positive aspect to it. He also has to produce his first budget in February, so, really, 17 days after he’s inaugurated, he has to have a Federal Budget, which is enormous. The Bush Administration is not going to produce a first draft of the budget, so there are probably people, right now, attempting to do this against the baseline, which is deteriorating daily. So, in some ways, this first budget is an extraordinary test of the capacity of the administration. We’ll come back to this but on this issue of trying to rethink what we need in terms of financial regulation, on a national basis, you can only do the first step nationally, and the second step has to be with Europe and then with the broader circle of countries. Because, obviously, the UBS headquarters is this big in Switzerland and it’s that big in New York. This is not something you can even begin to think about on a national basis and, so, one of the first connections between the U.S. and Europe is going to be right away on this issue. Next in the inbox; Iraq, obviously. I actually think Iraq is a bit clearer than we though it was. There is a broad consensus that it is time to get out; it’s pretty clear that, whether it’s Iranian manipulated or not, there is clear evidence that they are not prepared to sign what we call a SOFA agreement, a status and forces agreement, an agreement that would legalise the U.S. presence there after the UN mandate role runs out, which is at the end of this year. So, that’s a deadline and the Bush Administration had set itself a July 1st deadline to finish the SOFA and it’s been a mess and they can’t get it passed. They charge that the Iranians are paying people to oppose it in parliament. The question of where the Bush Administration leaves that issue is obviously one of the first challenges Obama faces. But setting the U.S. on an extrication course is not such a hard thing; there is a general consensus in that direction. What’s going to be the first big test is when violence flares, which I think it will; this is a really fragile success so far, and as we pull out I think, whether it’s in Kirkuk or somewhere else, it’s going to get worse. And the question will be, do you stop withdrawing or do you change policy? That’s the test; not starting. The next issue in the inbox is Afghanistan, where we have a war that is going into a tailspin and where the crisis is far worse than it has been recognised. Obama has raised the bar very high there during the campaign; I think for political reasons, I hope, because history tells you that this is not going to have a happy ending. But that’s not where he’s set himself up for, and I don’t want to take too long with this, so I will just flag that. We need a new strategy. I don’t think Europe is going to produce the additional troops that the U.S. feels it should so there is going to be a tension there with Europe. What will Europe produce instead, in Afghanistan? Now, the next issue and this one, I think, is in some ways one of the toughest, which is Pakistan. You know what they say about banks now in the U.S.; it’s too big to fail. Pakistan is too dangerous to fail but it’s failing, or it’s on that pathway. It is the reason we can’t win in Afghanistan; we cannot fight a war, we cannot win a war, with a sanctuary across the border. We couldn’t do it in Korea, we couldn’t do it in Vietnam, we can’t do it in Pakistan. And that’s exactly what’s happening now; every interaction between U.S. forces and Al

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Qaeda Taliban forces ends when they run across the border and we can’t follow. We can’t go on that way. There’s a big question of how much of a Western presence, whether it’s American or European or both, how much of a Western presence can the Pakistani political system withstand without collapsing? That’s a really tough question. We don’t have a Pakistan policy worth a name and, I think, devising one that has some prayer or working is one of President Obama’s biggest challenges and one in which the U.S.-European agenda is really very deeply engaged, and one, I should add, that is immensely important to this country for reasons of domestic politics. The next issue, and it was certainly highlighted yesterday by President Medvedev’s speech, is to rebuild the U.S.-Russian relationship, which is nothing right now. If for no other reason that Russia is key to a deal on Iran, to success on Iran. But, right now, that’s going to take some very serious negotiating and it’s going to take a massive shift in a policy that the United States has followed for at least 12 years, which is an implicit belief or statement that Russia has no legitimate interest on its borders. That so long as these countries become democratic, why should they care, even if there happens to be an American military base? Countries, major powers, always care, always have legitimate interests on their borders and it’s one of the major mistakes that we have made over the last 12 years. I’m not saying eight by mistake; I mean at least 12, in pretending that Russia is no longer there. And a series of insults have come home to roost and we are reaping a harvest that we sowed, starting with the unilateral renunciation, the ABM treaty, including Kosovo, including missile defence in Poland and Czechoslovakia, including sending NATO – breaking three promises, to the Russians, about that we wouldn’t move beyond West Germany, that we wouldn’t move beyond East Germany – this was a problem that started right at the end of the Cold War and it’s now come exactly home to roost, which is you knew there was no way to stop it until you got to Ukraine, which means the Russian border, and that’s chaos. So, we have to sit down with the Russians and rebuild a relationship, which is in smithereens right now, and at the core of that is going to be trying to talk about, what are your interests in the region, what are our interests in the region, and how are we going to work those out? Once we have some basis for talking, we’re going to have to do a deal to get their help on Iran. They are deeply ambivalent about Iran; they don’t want an nuclear armed Iran but they would love to see us carry the water and they would love to see us fail, or at least get hurt; stub our toe or worse, and so they are terribly torn and we’re not going to get their act of cooperation without giving something significant. My own view, if I were in the government, would be we give the missile defence installations in Czech Republic and Poland, which didn’t make any sense to begin with, but it’s going to be something on that order, I think. We can’t succeed in Iran until the U.S., Europe, Russia, are in a position to apply tough sanctions. I said those three because China will follow, I believe, if we can get U.S., Europe, Russia; China does not like to be the thumb that sticks out. And then finally, of course, Iran. He can only do very quiet, subterranean, laying the groundwork, for some sort of talks between now and June, which is the Iranian presidential elections. The last thing we can afford to do is to do anything to empower, inadvertently, Amadinajhad in those elections. So, the good news is Europe is finally going to have an active partner in this effort. The bad news is Europe is finally going to get asked to do something it doesn’t want to do, which is sanctions that really bite economically, which is probably going to mean sanctions on refined oil products; that’s what is really going to hurt

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in Iran. Although, tougher sanctions, even on unrefined oil, will hurt too but refined product will really hurt, and that’s going to hurt Germany and other European countries badly. This is a general piece of good news for Obama; Russian and Iran and other countries are very, very, very different creatures with $60 barrels of oil, or $70 barrels of oil, than they were eight months ago at $147 barrels of oil; very different. So, hopefully, he can meld the political calendar and the oil price calendar so he can act against Iran and act to try and rebuild the Russian relationship while oil prices stay low because of the recession. There’s lots more on my list but I don’t want to take other people’s time. Let me just touch on things we can come back to. He’s got deadlines on climate and non-proliferation; big, major international conferences that happen either in the spring of ’09 or the fall, in the face of climate. It’s going to be very hard to have anything to bring to the table in terms of enacted, legislated new American policy; maybe impossible. With the single exception, possibly, and this would be huge; U.S. ratification of the comprehensive test ban treaty, which the Bush administration killed after the U.S. had pushed it for 19 years. That begins to turn around the whole international nuclear situation. Whether he can do it in this first year, I don’t know, but if he can it will be something to watch. Debates that I think we don’t know about; will this be a protectionist administration, are we going to see a trade policy that’s a reversal of the policies over the last years? Will the recession reinforce what is already a democratic impulse toward protectionism? I don’t know. I think there will be a huge debate, internally in the administration, over Georgia and Ukraine. Whether and how to shelve the decision to move them rapidly toward NATO membership and the whole question of what role democracy promotion plays; I think those, depending on who he appoints, are still open debates within the administration. Let me stop there. I’ve tried to give you a few of the highlights but, as I said, this is a uniquely awful inbox. And one of the big tests of whether he is a great president or at least has the metal to be a great president will be whether he can pick priorities out of that, because the weakness of all Democratic administrations is always wanting to do too much. Those are the principal characteristics of every Democratic administration and when you’ve got solid majorities in both houses of congress the temptation is even greater. So, the question of how narrowly he can focus among this enormous number of questions will, I think, give you a good sense of how great this man is. I do believe, and I was saying this before we came down, this election is certainly the biggest political event of my lifetime, certainly since the 1960s in the United States, and I think this is a once in a generation political talent. And we’ll see. Thank you very much. MICHAEL COX: Thanks, Jessica, for that. The one word that has been used so frequently about this election is historic, so I won’t use it. One word that has not been used about it is surprising and I think, in some sense, this election is surprising in some really quite remarkable ways. The first and most remarkable way, of course, is that the experts predicted it and got it right. As you know, the experts have a long history; not me but many; of kind of predicting the future and getting it wrong. As you remember in many previous elections, the polls have told us one thing and, in the end, the American votes have done something entirely irrational and done the opposite. Well, this time, the only thing we can say is, the polls got it right, the experts predicted it. Literally a couple of weeks ago I predicted it and then walked off stage thinking, I wish I hadn’t said that; Barack Obama will win it. Well, he did, so we got it right. So, well done the experts, at least this once. I think

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the other very surprising thing about this election is Barack Obama is equally popular inside the United States and outside of it. This is, again, quite a remarkable development. As you know, the more popular one is outside of any one’s country, the more unpopular you’re becoming inside of it. In fact we’ve almost had an Obama-mania, not only inside the United States but also outside of it. A BBC poll, which, of course, is, again, bound to be true, showed that if Obama had stood in about 37 countries in the world, he would have won that election as well. Indeed, in Kenya, according to the BBC, he would have had a 92% majority. So, historic, again, is a word that has been used too frequently, maybe, in regards to this election, for all the obvious reasons that I won’t go over, because it’s far too obvious, to make the point, but surprising is another one. The big question, of course, is why he won. Again, somebody went round many conferences before being asked the usual questions; can he win, can a black man win, and that was really one of the questions which was posed time and time again. I think, in the end, when we look back on this election, actually, probably John McCain’s age told more against him than did Obama’s skin colour. In fact, probably, if anything, it’s now going to be demonstrated that the fact that Obama was black may indeed have helped him in many important respects. And this, again, goes back to some of the things, I think, that Jessica was saying; about the huge demographic shifts that have occurred in the United States over the last 40 years. It isn’t, by the way, that only black people in vast majorities voted for Barack Obama. Hispanics, who we were told were catholic, wanted the values issues; abortion, they’re against gay marriages; Hispanics voted for Barack Obama something in the region of 75 to 76%. We were also told that only people with BAs, MAs and, indeed, PhDs would vote for Barack Obama; in other words, the people who could read and write, in other words the middle class; they would be the only people who would vote. In fact, if you look at the statistics, actually, blue collar, white working class voters across the United States voted for Barack Obama in absolutely huge numbers. And, of course, he could never have got elected unless Joe or Josephine six-pack had not voted for him in very large numbers. Of course there’s other demographics in this, which are very interesting; the importance of youth; the 18 to 30 year old ranges voted overwhelmingly. Again, for those who are political scientists, and I don’t claim to be one, but, nonetheless, the political scientists would have a field day with this, looking at how the 18 to 30 year olds in this election voted as compared to 2004 and 2000. So, one can go through the various stats on this. Whether we call it a landslide or not, I don’t know; it’s close to being one. 52, 53% of the vote, large turn out, many of the states which were originally a certain kind of colour are now a different kind of colour. Why did he win? Well, all the factors have been discussed. Money. I can understand why Barack Obama didn’t want federal control over the spending in this election; that was probably the best decision he made very early in the campaign. Having promised that he would do it, he, of course, then decided not to, and if you look at the statistics now, you’ll know why; he spent nearly twice as much as the Republicans in this election; about $640 million to poor old John McCain’s $335. I never thought I’d stand on a platform and say, the poor old Republicans, but there you are; the Democrats spent nearly twice as much. It began with small donations and then expanding outwards. [aside] Secondly, of course, what the election demonstrated, apart from the power of money, if you go into an election, please go into an election with candidates whom are liked by one’s own party. It’s quite clear that McCain was not liked by his own party, he then took a very risky strategic move to appoint

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Sarah Palin as his vice presidential candidate. She was either identified as being too inexperienced, to right wing, or lacking in knowledge of the world or what was the capital of France. But, nonetheless, clearly one saw a very divided Republican party between two candidates who were, ideologically, miles apart from one another, and, again, I think that told very clearly against the Republicans. It’s the oldest political cliché in the world; if you go into an election, go in with a united party and with a united platform. As, I think, Jessica has also said, an extraordinary organisation, almost Bolshevik in its capacities of bringing out the vote, professionalism and made no mistakes. An election could have been turned by the false word, the wrong movement at certain points, as nearly happened. It never did. Technology; the use of the Internet played a critical part in all this. The demographics in the long term have played an enormous part in all this; we can go into deeper analysis. One can almost say that this election, too, is the final outcome of the civil right’s legislation of the 1960s. That, again, I think is pretty obvious. In some long historical term, the civil right’s acts of ’64 and after have, in a sense, come home to roost in 2008. I think, also, the message that Barack Obama put out was one of hope and change, to use the cliché. There was also, let us not forget, the Bush factor. President Bush, whatever one wants to say about him or against him or for him, and there are very few people who want to say anything for him, particularly Republicans, it seems, these days. It’s almost like that British joke about the Second World War; please don’t mention the war. Well, this was a bit like Bush; please don’t mention the president. It was really quite embarrassing; please do not come to my party. ‘Who is this man beside you?’ ‘That’s the president of the United States.’ ‘Really?’ The Bush factor clearly played against the Republicans in this particular election and I think there was a massive problem. Moreover, what has not been mentioned, is Iraq. If you look at what people have said; why did they vote in the way in which they voted, what were the key issues? And clearly it was the economy, healthcare, the fundamental social economic issues. Very little mention about the war on terror and there’s very little discussion on national security. At the heart of this, too, the unmentionable in the room if you like, was Iraq. This, in a sense, had bled popular support for the Republicans and I think the very fact that Barack Obama had taken the view, on the Iraq war, that he did clearly helped. And then finally, as all of us would recognise it, frankly the Democrats came up, for the first time in many years, with a world class candidate; with a world class candidate who was a brilliant speaker, wonderful human being, and clearly able to articulate the needs of the time with a large enough number of people. However, when everyone goes through all these particular factors, until the early part of September, the inadequacies of the Republicans, all the problems that were being faced because of Bush or Iraq, whatever one has to say about the capacities of Barack as a candidate, the reality is that in the early part of September, the two parties were neck and neck. Every poll you look at in about late August, early September, they really do show something like that. It was too close to call. Bob and I were at a conference here, really about the second week of September, and nobody really wanted to call the election, in the early part of September.

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Clearly in this regard, although all these other factors clearly play a critical role, what actually happened since September, this enormous financial crisis, which suddenly has smacked the whole world and the American people in the face, I think, is absolutely vital. It is the economy stupid. But in this case, it is more than just the economy stupid; it is the world economic crisis stupid. And I think that has been critical really in bringing about this opening up of the gap and then this final victory for Barack Obama and the Democrats, for the obvious reasons and I’ll just mention two: one, the Republican message, since Ronald Reagan, and again the point was made very well by Jessica, this is the end of the Reagan era. You might almost say it’s the end of the Thatcher era. Government is the enemy. Government is the problem. That was the Republican message. That was the liberal economic message. That was the message pushed by what I call the Anglo-American economic elite for the last 20 years. Well, who’s going to take that message seriously when the first thing you do need now is more government, more regulation, more intervention and more stake? And I think, clearly in this respect, the Republican message was clearly off line and that of the Democrats, more on message. I think the second thing I’d say is clearly this: if you look at the 2004 election, one of the reasons why Bush was able to do that, apart from playing on the question of [aside], but clearly in the 2004 election, what turned it was values. There were many aspects of the 2004 election, but I think it was national security and values which brought Bush victory in 2004. And both of those were driven off the agenda in 2008. Nobody wanted to talk about values. Who’s going to talk about values and all sorts of stuff like that when, in fact, one is facing the melt down? And national security was also pushed off the agenda. Economics pushed everything off the agenda and therefore made the two key issues for the Republicans impossible to exploit in this particular election. To conclude very quickly, the very same economic crisis which has effectively, I think, almost shot Barack Obama into the White House and brought the Democrats this huge victory, the very thing which has brought success is the very great danger facing the Democrats and the United States now. It is quite clear. I thought it was hugely significant that in the very week that Barack Obama won this magnificent victory, with this magnificent voice of his, and his terrific ability to articulate in many ways fears and aspirations and hopes – not just for the American people, but for the people of the world – and this was not just an American election; this was a world election. This was a global event. In the same week, Wall Street dropped 10%. And I think that tells us something very significant about many of the problems that Barack Obama and his Vice President and the Democrats are going to face. And I think more than anything else, this is going to be the number one issue which is going to shape, in the first year and probably more, this particular candidate and this particular White House. What I think it will do, there will certainly be messages within Congress calling for protection of American jobs. I think if the economic crisis has revealed anything, it is that, frankly, the United States could clearly not solve any of these problems by itself. The sheer economic issues, which are so interconnected and so intertwined. And here, globalisation does play a very real role, as one saw. Immediately, the U.S., President Bush – although not in a terribly effective way – had to turn to the Europeans. He has to turn to the Chinese. He has to turn to his economic partners. For once, I think, unilateralism is not only a bad choice; it’s irrelevant in this particular current situation. I think Obama’s honeymoon is going to be real. Obama himself

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is the message. I’m not sure he’s got many clearly articulated policies. If I go down the series of things he’s got, there aren’t many articulated clear policies. In some ways, he is the message. It is the message of hope. And I think, frankly, and speaking personally – and I’ve been speaking personally now for too long and so I’ll shut up – the reality is that he is the message and I am, frankly, very, very, very thankful that it’s him in the White House at the current moment because I think we do need, in this very critical moment, as Jessica said, we need someone with that kind of vision. The problems he faces will be immense, but I’m certainly very glad, myself, that the person sitting in the White House for the next four years, at least, will be Barack Obama and not somebody else. Thank you very much indeed. BOB SINGH: Let me rain on the parade a bit. It’s a dirty job, but someone has to do it. It strikes me that this is a historic moment, and if you were awake in the early hours of Tuesday morning and you heard Obama’s speech, if you weren’t moved by that, then you need to check yourself for a pulse. At the same time, it’s a fairly regular event in politics whereby, I think The Who put it best in 1968, in Won’t get Fooled Again, when they said meet the new boss; same as the old boss. Now, if there’s a moment when that doesn’t seem to apply, it’s seems right now. But I want to throw some reasons out why we should be cautious about being too premature about prognosticating on a Democratic realignment generational change and a President who will make the rise of the seas stop, who will suddenly make peace with Sarah Palin, dogs will finally pay respect to cats, and if he doesn’t do so, he’ll be a failure. I think one of the interesting things, as Mick suggested, is that in contrast to 1980, Reagan was the head of a movement, a genuine political movement that had genuine beliefs. And he had been that, really, for the best part of 16 years. Obama is the message. Obama not only speaks for change, he personifies the change. He is the change. But the question is, what change? Is he the cautious, conservative, pragmatic, calm, temperamental, bipartisan, post-partisan person that his rather greeting cards, simplicity style of speeches suggest? ‘We are neither a red state nor a blue state. We can bring everyone together. If the world stands as one, as they did in the Cold War, there is nothing we can’t achieve’, apart from the fact that the world didn’t stand as one in the Cold War; it was rather divided into two or more. Is he that cautious, pragmatic, calm, temperamental individual? Or is he the straight, down the line, orthodox, programmatic, progressive, liberal Democrat who has done virtually nothing ever to buck his party or conventional wisdom? In 2002, his judgement, as he put it, rested on the notion that when he was not in the Senate, he opposed the Iraq war. When he was in the Senate, in 2006, he also opposed the one measure that ironically has allowed him this year to neutralise the Iraq war and to put himself in pretty much the same ball-park as McCain when it comes to a draw down in Iraq, namely the search. Is he the rhetoric and the occasional votes, where he was against free trade and arguably the most anti-free trade Democratic presidential nominee in a generation? Or is he the guy who said in Fortune Magazine, in the summer, that that primary and caucus rhetoric was overheated? Which is to say how he marries up his clear temperamental pragmatism and his clear instinctive liberalism is an unresolved question. You don’t know it. I don’t know it, and maybe, neither does he. And that’s significant, I think, also because when it comes to the politics, not of the campaign but of governing, what he’s going to face is some really difficult questions. Trade now accounts for 23% of the American economy compared to 15% in 1990, which means

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that the United States cannot, as Mick suggested, it cannot withdraw from the world. It is interdependent, at least at an economic level, amongst others. But at the same time, Americans, if public opinion surveys are to be believed, are withdrawing on that basis from the world. They are turning inwards. And his party, which has large majorities now in Congress, not filibuster proof in the Senate, but almost there, is very, very strongly anti free trade, unlike the period when even Clinton, let alone Carter, was in office with his own party in control of both Houses of Congress. You don’t have in charge of the major committees, the old style conservative, moderate, Democrats. You have a much more uniformly progressive party. And one of the central stories then, or two stories, I think, that will play out in deciding whether we are in the process of a genuine realignment, a lasting realignment that favours the Democrats. One is how Obama deals with the inevitable pressures that have accompanied every Democratic president from the Democratic Congress to go further and faster. And I don’t think we have any idea whether he will do that. Take trade, for example. It seems obvious, at least to some of us, that the best mechanism for taking millions out of poverty around the world, is a reduction of tariff barriers, the end of subsidies, like the Common Agricultural policy, farm subsidies in the States, re-embracing the Doha round, making more bilateral trade agreements. And yet election year politics, this year, have stalled – Columbia, Panama, South Korea. Does Obama really want to squander what precious political capital he has on forcing difficult trade votes for Congress over the next two years, given that he needs his party to be together; they need, in their own self-interest, to be together and the usual dynamics of American election campaigns haven’t disappeared, which is to say Obama is not going to be conducting his administration, over the next four years, with a view to a one term mandate. He’s going to be looking to running for a second term in 2012. And though he may portray himself as a global citizen, as we’ve seen this week, to relief, we don’t have a vote in 2012. Americans do. But Democrats in Congress will face a vote in 2010, and they are going to face a base, which contrary to his proclamations of post-partisanship, if you notice in his speech on Wednesday morning, when he started talking about, ‘we need to govern with the other party, the other party is the tradition of individual rights, of nationhood’, there was virtually silence in Chicago. And when you looked behind the eyes of Democrats, there’s a good reason for that. Their logic was, ‘no we don’t. We’ve got the numbers and it’s pay-back time. We are going to enact the kind of progressive measures which we really believe in. Move on dot org; we really believe in it. The teachers’ unions, we really believe in it. No, we’re not going to go for education reform, thank you, Mr President.’ Environmentalist groups who aren’t willing to put combating climate change off, because of the financial crisis, for a couple of years because that threat to them is far more serious. And never mind the fact about financial bombs going off. What is real bombs go off again? What if Obama goes, never mind NATO, who aren’t going to stump up for Afghanistan or Germans start allowing their aircraft to finally start flying at night again in Afghanistan. Never mind the European allies of NATO. Already, Barney Frank and David Obey, who’s going to be Chairman of the Appropriations Committee, have called for drastic reductions in the defence budget to fund domestic programmes. How is Obama proposing then to deal with Afghanistan and Pakistan? His commitment is 1.5 billion in non-military aid to Pakistan; one billion to Afghanistan, and tripling aid in terms of aid for infrastructure, to health, to housing and to education in Pakistan. How’s that going to go down with the Democratic base at this particular point in time? And what’s he going to trade in then?

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So the central story, it seems to me, is going to be, how does he cope? How does he cope with his party and with, let’s be honest, the unrealistic expectations which have not only been placed upon him by commentators, but which he himself has raised? He has run, not so much for Commander in Chief, but cosmopolitan in chief, for global citizen number one. And it’s rather ironic that we see around the world now two phenomena. Firstly, we see many American academics, who for years have said, no, we’re not exceptional; we’re just like everybody else, endorse the notion that only in America. And at the same time, we’ve seen, I saw on TV last night a number of people of colour outside America saying, what this shows, what my kids are telling me is that their family, that family that’s going to be in White House in January, is just like us, and it shows that we can accomplish anything. Well, actually, no you can’t. Not ‘yes we can’, because you’re not in America. And the day that we see anybody in a senior position in British government, and let’s take for granted we’ve already seen Colin Powell and Condi Rice in positions which are unheard of in this country and most of Europe and much of the world, is still far, far away. The second story, however, and I’ll give you some hope on this – I’ll be generous for once because I’m a friend of Mick’s – so the second story, however, is that you may get a Democratic generational advantage for a simple reason, by default. And that is the implosion of the Republican party, which is to say that I think we are in for an almighty fight for the heart and soul of the Republican party, and indeed a fight in which the Almighty figures highly, which is to say the battle is likely to be between those whose basic attitude to life is, what would Jesus do, and those whose attitude to the Republican party, from those who are secular and have only been born once, is what would Reagan do? And I think if the Republican party goes down a Palin-esque route, if we end up with the major contenders for the 2012 nominations being Palin, Huckabee, Romney and God knows, literally, who else, then basing your party on rural, white conservative voters in the south and the mid-west is going to condemn you to oblivion for a generation. So I think pronouncements of realignment are premature and everything is to play for, but I wouldn’t underestimate, for a moment, and I wouldn’t get too euphoric at the moment and replace wish fulfilment for reality. In a sense, I think the best advice, that I could possibly offer, and I try not to do it as often as I should, is to say, you know, when we’re thinking about Obama, maybe the best way to think about Obama is Obama-esque. Be like him. Cool, calm, collected, looking at the facts, knowing what you believe in, but making the judgement according to the world as it is, not just the world as you might want it to be. Thank you. CHAIR: We have a fair spectrum of views over here. So let me just throw this open to the floor. If you could identify who you are at the same time, that will be helpful for the speakers. PAUL FRIEDMAN: I’m Paul Friedman. We heard a bit of a laundry list of Obama’s inbox and with a debate called, ‘Where Now for the United States After the Election’, if this was being held in the United States, I think people would be astonished that health care didn’t get included in that. So, I guess I ask the panel, where does health care fit into that, or has the more recent events pushed that off the agenda? CHAIR: We’ll take two questions together.

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RANJIV GUNAWAGNER: The name is Ranjiv Gunawagner. My observation here, and I would like some ideas from yourself, this issue about Iran. This was created by, this problem, by the Bush administration. Should Obama take the same stance as Bush has done? So my thoughts on this is that India acquired the nuclear arms, Pakistan also acquired that, and before, people were saying, don’t do that because xyz. But nothing has happened to date. So with Iran, I just want to know why is it so anti, why all the parties are thinking along the same lines in terms of Iran. CHAIR: We will just have a third last question here. MEMBER OF THE FLOOR:May I just thank Bob Singh and Jessica Matthews very much indeed for bringing us down to earth, and an end to the tsunami of gush we’ve been subjected to in the media. Isn’t the first point of conflict with Europe really going to be on his protectionist position, particularly as the government here has expressed concern today, and in fact called for an acceleration of the Doha round talks before inauguration day? That’s the first thing. The second thing is, couldn’t he very well be a victim of his own oratory in promising too much? Universal health care, lower taxes for 95% of families, increased spending on infrastructure. I mean, that would be a tall order at the best of times and this is the worst of times. And finally, the whole area of Afghanistan troubles me immensely. I see it as another Vietnam. Pakistan is a failed state. The borders are totally porous. He’s even more hopeless than McCain in threatening to bomb Waziristan. CHAIR: Thank you very much. JESSICA T. MATHEWS: Well, on health care, the reason I didn’t mention it was because I was asked to talk about the international scene. But it’s also fair to say we’ve been working on the health care in the United States for 55 years. And we haven’t gotten there yet. And I think there is action forcing events on these other issues, and something will start on health care reform but it’s going to be, I wouldn’t hold your breath. On the question of why is it so awful for Iran’s nuclear, the answer is several-fold. The first is that proliferation never happens in one country at a time. India went nuclear because of China; Pakistan went nuclear because of India. They always happen in clumps. This particular location raises the prospect of Saudi Arabia, Turkey, Egypt etc. and it’s not a pretty picture. Also, we’ve had Iraq and North Korea having used the cover of the NPT to go nuclear covertly if we have, you could argue that they taught us the lesson. If a third country does it, the NPT is a piece of paper and nothing more. And the NPT is the centrepiece of the global nuclear regime. And thirdly, well third and fourth. Third is, I wouldn’t call what’s happened in South Asia not so bad, particularly the prospect of a Pakistan without a stable government. I don’t sleep well with a nuclear run Pakistan that doesn’t have a stable government. And fourthly, the character of a government determines how others think of it, and this is not a government that you can feel particularly comfortable with nuclear weapons. They are already bent on dominating the region and with nuclear weapons, whether they use them or not, or even whether they test them or not, they have a great deal more power. So I think there is an enormous case why one should be exercised about Iran becoming nuclear. I don’t think

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trade will be the first area of conflict with Europe. I think Afghanistan will be. And I think that Obama’s anti trade rhetoric in Ohio had to do with Ohio. This guy is a tough politician. He did what I think he felt he had to do there. I haven’t seen any sign of protectionist impulse in him but one hopes that Doha will get resurrected. But between when that happens and when it gets completed is several years away at best. So, my guess is there will be all kinds of struggles between the U.S. and Europe, between now and then. MICHAEL COX: Just picking up two very quick points. It seems to be that Jessica posed the problem about Iran but then didn’t take the next step and say, well what do you do about it? Nobody, presumably (except the Iranians), want nuclear weapons. I take that as a given. They want them but nobody else does. The question is, how do you stop them from developing, and in the end, acquiring them. Now, the reason why, obviously, most people don’t want them to get them is the nature of the Iranian regime and, particularly in the case of the United States, a 30 year cold war effectively between Iran and the United States. Now, you may want to blame one side or the other; I couldn’t be bothered about that, but you simply have this long cold war. And in that context, with President Ahmadinejad leading Iran, one does get slightly worried. Now, the question is what to do about it. And actually, we don’t know. We just don’t know. First of all, the United States has handed the issue over to the Europeans, so the Europeans talk to them. And then they send in the IAEA and Baradei, and they keep talking, and that’s very nice. And then they send in the Europeans again and that’s extremely nice. And then they say, well let’s have some sanctions, and then the Russians and Chinese say no. And so we can’t have sanctions, which of course then brings you to the question of military options. And of course, once you start looking at the military options, they’re horrible. They are absolutely horrible, not only for the consequence it will have on Iran, but also on the stability of the region, settlement of Iraq, settlement of Afghanistan. You’re not going to get a settlement in the West Bank, you’re not going to get a settlement in Gaza. You’re not going to get a settlement in Southern Lebanon etc, etc. The Iranians are on a roll. They are on a roll partly conditioned by oil prices, but also conditioned by the war against Iraq which has opened up space for Iran in the region. Now, therefore, what do we do? Or what does the United States do? Well, it has two options. One is to allow Israel to do it, and maybe Bob would want to say something about that because we’ve discussed this issue before; not do it itself because the consequence of doing so are so horrendous, or thirdly, come to terms with the fact that Iran will one day acquire nuclear weapons. Now, if that is the long term strategic likelihood, which I think it is, given all the other options are off the table and are impossible, then that simply must open up what I would call the Nixon option towards Iran, which will mean a grand bargain. Now, how any American president is going to sell the grand bargain when Ahmadinejad is running Iran, and given what he said about Israel, is very, very difficult. But I do think that will come at some point, and maybe one of the big issues he will face will be that Nixon question about Iran. A new election in Iran could open up that kind of possibility. On the question of Europe, very quickly, I agree with what was said. I think the other big difference, by the way, on the United States and Europe, will be on Russia. I just feel there’s an entirely different way of thinking about the Russian question. Basically, the European Union wants a long term agreement. It sees Russia, ultimately, as a partner, and I think that is where it wants to move. This is particularly important, of course, given the degree of oil and gas dependency, at least for certain countries; not all, particularly Germany. And I think this is also going to be another area of certain differences that we’re going to see. I think we

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will live in a honeymoon period in the EU/U.S. relationship for a period, but I do think we’ve got some things coming towards us. BOB SINGH: Yes. If you want to get down to Ladbrookes and put some money on what’s the first issue that ruptures the trans-Atlantic relationship again, well it could well be Afghanistan. It could be protectionism; it could be Russia. And a lot of these issues are interdependent. It’s quite plausible that an Obama administration, even before January, will want to come to European heads of state and say, in order to make engagement with Iran plausible by Washington, you need to join us with tougher sanctions. And that means tougher commercial sanctions from states like Germany. And that means they’re going to say no, because we, in this period, are not going to compound our economy further. Obama may want to come to Europe and say, in order to rebuild a relationship with Russia bilaterally, we need you on side to be tougher with us. And Europe are going to say, stuff that; we’re dependent on energy supplies, and in this particular point in time, that’s really serious. And what’s interesting about this, I think, and for some of us who have been persona non grata in polite society, in the UK and academia for more years that I care to remember, but especially over recent years, what’s significant is that we’re already seeing that actually, it wasn’t all about Bush. The Iranian situation, as the gentleman suggested, was not created by Bush. We can argue about whether or not it was exacerbated by it, but it was not created. And what is significant about the current moment is not just the hope that Obama is bringing, but also is the revealed reality that his administration and the Democratic Congress will show, which is that there are fundamental differences in viewpoint, in interest, in opinion and in priorities between Europe and America, whether it be climate change, global warming, trade, the War on Terror, democracy promotion in foreign policy or even the fact and nature of American power itself. And these, I think, are not going to go away, however great it will be to see the return of syntactically correct sentences and grammar to the White House. CHAIR: That’s the ultimate challenge. We’ll take three questions together. MEMBER OF THE FLOOR:Thank you very much. I come from Kenya and I was interested when you talked of Obama winning an election in Kenya. I think he’s more popular in Nigeria even in Kenya, but that’s not my question. My question is, none of you have talked about the Middle East peace process. I’m wondering what the effect of the Palestinians and the Israeli deal will be under Obama. And we’ve seen organisations come out very strongly to determine, so to speak, who the next president of the U.S. will be and his agenda. I don’t know whether they will be a little apprehensive that Obama is more liberal and maybe McCain would have been more amenable to the right in both countries. MEMBER OF THE FLOOR: Thank you for the lectures. You mentioned the performance of the stock market and Obama’s victory. I noted on the exact day of Obama’s victory, and in some countries, the day after his election because of time differences, the stock market of U.S. and China, including Shanghai, Hong Kong and Japan, they all rose significantly. However, the stock market of Europe, including London, fell slightly. What do you think about it? Is it that maybe the European, as you describe, cooler, calm after the fact? Thank you.

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DAVID ROBINSON: My name is David Robinson. This is a question for Jessica. It relates to your observation that Obama will be extremely effective simply, partly because of his election campaign being so well run. My question is, to what extent was the efficacy of the smooth running of his campaign attributable to Obama himself? Does it have his imprint, or was it, in fact, those two very capable election campaign managers, Plouffe and Axelrod? And what can we expect from the administration? He’s appointed a slightly partisan Chief of Staff. JESSICA T. MATHEWS: Let me take the last one first. Campaigns are always a direct reflection of the candidates. There are very few general rules in politics. That one is. And in this case, we know from all kinds of reporting that he was directly involved hands-on. Let me tell you one extraordinary story. My son was a volunteer in the last couple of weeks. He was on a conference call with 20,000 – I don’t even know what this technology is – 20,000 volunteers and paid staff in the seven battleground states, on Friday night before the election with Obama for 90 minutes. They were discussing message, strategy, trends in particular counties. This guy was as deeply involved in this as you can possibly be, down to the level of counties. And I know he did weekly conference calls with the paid staff all the way back through the beginning of the primaries. I have never heard of a candidate as deeply involved. But you look at the McCain campaign. He fired his whole staff three times. His whole staff! He went bankrupt once. It was as erratic as - that label fits. Hilary Clinton’s campaign looked exactly like the Clinton White House; exactly – big egos, nobody with defined areas of responsibility, overlaps, fights; very, very poorly run and managed. And one could go back to all kinds of things. Campaigns do reflect the candidate in very, very real ways. The stock market, I think, means absolutely nothing. The volatility in the market, I don’t think you were seeing any message of any kind. In the old days when markets moved 20 points a day, normally you could get a message. In these days, when they move 500 points on no news, I don’t know what you say about that. On the Middle East, here’s the big change, the biggest change. The U.S. view, under President Bush, has been that talking to somebody you don’t like legitimates that regime. And it has been a function of U.S. policy against Cuba, now, for 50 years. But it has never been, except for Cuba, a belief of American policy for that. So it really was an exceptional and a deviation from policy, and it has crippled us all over the world because the people you need to talk to are the people you disagree with. That’s going to change in the Middle East. So that’s one piece of good news. It’s one opening. The other good news, of course, is that Iran cannot cover its external accounts at $70 a barrel of oil. So if it stays in this neighbourhood for any length of time, they are in very severe economic problems. They can’t cover their external accounts, meet domestic needs and funnel money to Hamas and Hizbollah at all. They can’t even come close. So that is one reason why tougher sanctions are particularly effective if they can be arrived at, because they will really bite. The financial sanctions already have hurt. So that’s a piece of good news. The bad news is that we are now in a situation with, well, the other piece of good news is the Israeli/Syrian talks that have been moderated by Turkey that are underway for several months, which is wonderful news because it is very good news that somebody other than the United States is taking the lead, taking the initiative. This is a very important piece of news

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for the world. The bad news is that neither Israel nor Palestine has leaders who can negotiate right now. Israel doesn’t even have a leader. They’re going into general elections and if Netanyahu gets elected, I think the prospects of moving forward are very small. I do think it’s the central, everything in the Middle East is connected; you pull one thread and everything else connects to it. But it can’t be done if, maybe Netanyahu will surprise us all and become a Nixon to China. Who knows? But I doubt it. And he may not get elected, but I think the administration will have to wait a bit and focus on taking advantage of a time of weakness for Iran with low oil prices and… And Syria, I believe Syria, peeling Syria away from Iran is a huge strategic opportunity which we have completely missed. Bashar al-Assad has been making clear that he would entertain that, for a price. So there is that, that’s the opportunity and that takes away Iran’s only ally in the region. MICHAEL COX: What do I say about Israel? Ten years ago I was miserable about it. 20 years ago, I was even more miserable and now, today, I’m even more miserable. It just gets worse and worse and worse, I’m sorry to say, and there are all sorts of reasons for that happening. The reality is, and this is not meant as a defence for any American friends in the audience or on the stage, I don’t think you can have a rational debate about Israel in the United States now, for all sorts of reasons that have been discussed at length. I’m not saying the Europeans have a fundamental wisdom on this, they’re not; but I do remember a colleague of mine from the University of Chicago and from the University of Harvard, John Mearsheimer and Stephen Walt trying to debate their book on the Israel lobby and the American foreign policy, and they said they came to Europe and they got, at least, a hearing, and it was much more difficult to have that kind of open debate and discussion in the United States. And Obama, in a way, has reflected this in many respects. Let’s be honest about it. For good reason, I’m not blaming him; it’s the oldest politics in the world to play ethnic politics. Make sure you’ve got your blocks. Nearly 80% of Jewish votes went to Obama in this. His Chief of Staff plays into that very strongly and I don’t blame him. That’s the nature of politics. That’s the nature of democracy. I just don’t think anybody would want to touch the Israel question, to be perfectly honest. And I don’t think Obama will. I think this is going to be just another four years of this. The reality is that this will not be addressed. And the Palestinian situation will simply get worse, the kind of apartheid situation on the West Bank and elsewhere will deteriorate. We talk about democracy promotion; well, we promoted democracy, didn’t we, in Gaza? The problem is the wrong guys won. I lived in Northern Ireland for many years and they said well, elections are a wonderful thing as long as provisional IRA members don’t win them. And that’s the situation with Hamas. They’re just clearly a mass movement that has support. They had their elections, which were presumably more or less free and fair, and what did we do, including the Europeans, to our shame? We imposed an economic embargo on Gaza. And it’s not enough to say we’ve got no Palestinians to talk to. We said this about Yasser Arafat. He was a corrupt guy, I know; and the PLO were not my favourite kind of friends, but we had a leadership and we said we’ve got nobody to talk to. Well, the PLO have now gone; now we’ve got really nasty guys. We’ve got Hamas and we’ve got Hizbollah, and we say we’ve got nobody to talk to. But which Palestinians will be ready for us to talk to? Nice, decent, liberal, tea-drinking, Starbuck coffee kind of Palestinians are not going to emerge over the next few years for us to talk to. We’re going to have real problem here. So this situation is just simply going to deteriorate, and frankly, this is one of the fantastic and fundamental Achilles heels of this wonderful place we call the United States of America.

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And I just don’t think it’s going to get any better. And on that note, I’ll say no more. Bob, do you want to come up with a more miserable scenario, because you’re good at miserabilism! BOB SINGH: Are you mis-characterising again? No, let me just make a couple of points and a brief one on Israel. Firstly, a couple of points that Jessica referred to. Yes, Obama has run a superb campaign, but when the only objective of what you’re doing with your organisation is to win an election, it’s rather different than being in government, when you’re dealing with multiple crises, when you’re dealing with a huge federal bureaucracy which is not necessarily on the same page as you, which has entrenched institutional interests that differ from you. So I think we’re going to be in a rather different situation in terms of governing than campaigning. It bodes well, but it’s no guarantee of success any more than Bush as the first MBA president was a guarantee of competent management. Secondly, in terms of not talking to our opponents, I point you in the direction of Ronald Reagan’s first term and Russia as an example of where actually you didn’t engage with your opponents precisely because you had adopted policies to push them further and further and further down the toilet until they were forced to change and forced to come to you on your terms. And I think while it’s good to talk, we’re in a post-feminist environment now, so they tell me. I got in touch with my feminine side over the holiday, but I didn’t like the look of it – it’s far too prone to consensus and being reasonable. But we are in a post-feminist side and Obama appeals to that. But the reason why Israel and Syria are talking has nothing to do with their strategic interest and has everything to do with the internal problems of Ehud Olmert and Bashar al-Assad over recent weeks and months. And the fact of the matter is, as Mick has made plain here, no matter how erudite your diplomacy, whether you were Bill Clinton in the 1990s or Jimmy Carter in the 1970s, and probably Barack Obama now, until the facts on the ground change, and you are not going to persuade Hamas to decide they don’t want to destroy Israel, and you are not going to persuade the Iranians they don’t want to do that, and you are not going to dissuade the Iranians from pouring missiles into Hamas and Hizbollah more and more and more. And the situation is going to be that if the U.S. does not resolve the Iranian nuclear programme, yes, Obama seems to be indicating that he believes in traditional doctrines of engagement and if engagement fails, containment and deterrents. But the picture in Tel Aviv looks rather different, and contrary to popular opinion, Washington cannot control what Israel does. It’s often the case, in fact, that it’s the tail that wags the dog. And I think in that context, if there is one thing I urge you to go and put down on Ladbrookes rather than the first rupture in our trans-Atlantic relationship, it’s another war in the Middle East over the next four years. JESSICA T. MATHEWS: Very quickly, there are some factual errors there. The U.S. never did not speak to the Soviets. Never. We couldn’t afford to. But we have adopted a very different policy with… BOB SINGH: Do you remember the Soviet leaders dying on Reagan? JESSICA T. MATHEWS: There was never a period where the U.S. refused to talk to the Soviet Union. That is fact. Secondly, there is an issue with respect to Syria that is very important, which is that you have to go and look at the map about how Hizbollah can get missiles without going through Syria. And Syria can’t control its borders if it chooses to. So I

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actually don’t disagree with the view that, I have been somebody who says it often time in the U.S. that we can’t have a rational conversation about Israel. I happen to believe that. But I do think also, just to temper this, that there will be an important difference between this past administration and the coming one in this respect. I think it may well be the case that we don’t see any progress on a peace settlement in the next four years, but this administration will not be supine in allowing the Israelis to build settlements or to quit dismantling them. I think that will be a difference, an important one. At least it won’t get worse as fast. CHAIR: Unfortunately at this moment we do have to draw the proceedings to an end. I’m particularly thankful for everyone who has come out on a Friday night to show up as they have. Of course, it is a Friday night - we must always remember there is life after Obama. The evening is still young for some of you, anyway. So off we go. There is always 2012 for others. The second thing I would say is that I think, what I find particularly interesting is that we’ve used very interesting words we never expected to hear again, not in my lifetime, such as historic and revolutionary, because we were told history had come to an end, everything was historical but nothing was particularly historic. I think this probably is a historic moment, but whether it’s going to be a historic moment depends very much on whether the opportunities are seized or not. Otherwise it will just be a historical moment like many others. And the last thing I would say, I particularly take away from two of our speakers, ignoring the historical monument to my left, that the Europeans are at the famous cusp. Yes, they are going to have to pay more for Obama. They are going to have to have more troops in Afghanistan. They might have to have tougher sanctions against Iran. So if Obama is the ultimate fairy story, then the moral of that fairy story, like so many that the Europeans may learn, is be very careful what you wish for. And on that note, I would like to thank our three speakers for coming along and sharing their views. Thank you very much.