RICHARD N. HAASS: Good morning, everybody. Thanks for coming in.
Let me just take a few minutes to talk about some of the ideas in the article. Let me try to connect it to where I think we are and will be as we move towards ultimately an election and a new administration.
My argument, as Lisa pretty much summed it up, is the following. We are at one of those transition points in history. Usually these things are visible only in retrospect. I actually believe it's visible now. And this is a major historical turning point.
If you think about it, the first half of the 20th century was a time of classic multipolarity in which a few largely European nation-states emerged as the principal actors in the world -- Germany; France, obviously; Britain; and then obviously the United States as an emerging power, Japan as an emerging power. And the first half of the century was essentially, again, fairly familiar, fairly classic, great-power struggle.
Then, with World War II, you had the emergence of a new geopolitical era, which was essentially bipolar. The United States and the Soviet Union emerged as the two dominant countries in the world. The European powers were much reduced. Germany and Japan were placed under special restrictions. And for four decades, we had a world system dominated by two. And fortunately, while it was competitive, war did not break out. It was, at the end of the day, a cold war and not a hot war.
That lasted, as I said, four decades, essentially until 11/9/89 with the demise of the Berlin Wall, leading within two years to the demise of the Soviet Union itself. And there began not a pure but a period of what was coined unipolarity. Again, it wasn't purely unipolar in the sense that all power was not in one set of hands, but there was a degree of concentration of power that was ahistorical and a degree of American primacy that was ahistorical. And I believe it was Charles Krauthammer who deserves the credit for the phrase of unipolarity.
Interestingly, Krauthammer was more correct than he realized, though, because when he titled the article in Foreign Affairs, he called it "The Unipolar Moment." And it lasted what, in historical terms, was a moment, barely two decades, not quite, though next year is the 20th anniversary of the fall of the Berlin Wall.
But I believe we have now entered a new era of nonpolarity. Just to get the definitions right, it's an era of distributed power in which there are literally dozens of meaningful actors, state and non-state alike, in which power, in all of its various manifestations, is widely distributed rather than concentrated.
And just to get it right, I'm not arguing the United States is in decline. We are not. The United States will continue to grow somewhat stronger. For example, the U.S. economy today is roughly $13 trillion in GDP, plus or minus. I would expect that it will continue even if we have a slight recession or even a -- (inaudible) -- deep and enduring recession, ultimately it will resume growth. And the U.S. economy in 10 years will be greater than it is today. Other forms of U.S. power are also considerable, like its military.
So my argument is not that the United States is declining. It's not that the United States is no longer the most powerful single entity in the world. Rather, my point is the relative position of the United States is diminishing. And it's diminishing in large part because of the rise of other actors; again, state and non-state alike, many of whom have acquired various forms of power which either limit the ability of the United States to translate its power into influence or can offset U.S. power in one form or another. Essentially that is the essence of this new era.
I think it's come about for three reasons. One is the natural stuff of history. Certain states get better at putting together the elements of productivity than others, and we've seen it particularly in the Asian countries; not only in Asian countries, particularly in Asian countries. And this means they're accumulating great amounts of wealth. And, to some extent, wealth translates into other forms of usable power. So this is the stuff of history.
Secondly, there's globalization, which is essentially about flows of just about everything you can think of -- virus, man-made, computer and human, to dollars to oil to people to e-mails, what have you, greenhouse gases -- that flows across borders that can't be regulated but challenge the authority and capacity of states.
And I also believe that this new era has come about, and certainly its arrival has been accelerated by mistakes in U.S. foreign policy and U.S. economic policy. I believe that Iraq is in part responsible. I do believe that Iraq was a classic war of choice that has turned out to be an extremely costly choice.
I believe that it's been expensive economically. The estimates, I think, are probably right, between $1 (trillion) and $2 trillion of immediate and delayed costs on the Iraq war. The military cost has absorbed a large part of our military capacity, certainly our ground capacity, Army and Marine. And I believe it will have lasting consequences and enduring consequences for U.S. military capacity.
We're also obviously in Afghanistan. So I think that we are -- which I would not call a war of choice. I would call Afghanistan a war of necessity. But again, the result is still, though, that militarily we are heavily committed at the moment. But I think, again, the mistake that was Iraq has been, again, a costly war of choice.
I believe our energy policy, or lack of it, has accelerated the American position of losing some of its advantages. We are funneling large amounts of dollars to the producers, which again is a manifestation of nonpolarity because, whether it's the emergence of sovereign wealth funds, essentially now $3 trillion, growing at roughly a trillion a year -- it's giving them, beyond sovereign wealth funds, simply sovereign wealth.
It's giving countries like Iran and others capacities, then, to go, for example, support militias and terrorist groups, which is another form of nonpolarity. So it's the opposite of a virtuous cycle or circle. So we're seeing those kinds of phenomena. Our energy policy has also exacerbated our economic problems, our current account deficit, and so forth.
And then I also believe some of our own economic decisions, the way we spent money over the last seven, eight years, as we've moved from obviously fiscal surplus into fiscal deficit, the fact that we are now so dependent upon inflows of capital, has reinforced -- again, it's another manifestation of, I think, some of the decisions of the Federal Reserve in terms of lowering interest rates, has reinforced it as well because they've accelerated the flight away from the dollar to reinforce inflationary pressures out there in the world.
And I think, again, all these things are both reflections of nonpolarity yet further reinforcing it or contributing to it. And I think the net result, again, is a world of more distributed power, of more hands, of more different types than we've ever seen before. The results are that it's harder to organize the world. There are more capable -- there are more independent entities out there, some of which mean us harm. Al Qaeda, if you will, is another example. I think it's a world in which it's harder for the United States to translate its still considerable power into influence.
So I think this is the backdrop to our current foreign policy situation. Well, this is the strategic backdrop. I think the more immediate backdrop is twofold. One is a large number of particular problems, largely, though not totally limited to the greater Middle East. But if one looks at Iran, Iraq, Pakistan, Afghanistan, stability questions in the region, militia questions and so forth, a lot of our problems, though again not all of them, are located in the Middle East.
And I think also the signature challenges of this era are global challenges. Every era has its signature or defining challenges. And I believe that the signature challenges of this year of international relations will be global, whether managing global financial flows, trade flows, service flows, capital flows, whether it's managing climate change, whether it's managing the spread of nuclear materials or disease or what have you, but essentially the dark side of globalization.
And so whoever is the next president is going to have to, against this backdrop of a nonpolar world, deal with this rather daunting in box of global and precise or particular challenges, all at a time that the United States is not optimally positioned to do so, given what I went through before, the fact that we are militarily stretched, economically, in something that certainly looks an awful lot like a recession, highly dependent upon inflows of dollars and obviously heavily dependent and vulnerable to energy supplies and prices.
And I would just simply say that if one were to contrast the handoff from the 42nd to the 43rd president, at a time the world was largely though not entirely at peace, the U.S. military was largely at rest, the United States was in fiscal surplus and the United States was growing at probably 3 percent plus, and one contrasts that handoff with where we're going to be in nine months, most likely -- we're involved in two ground wars plus a global struggle against terrorism, where oil prices have increased four-fold, in which the United States has gone from fiscal surplus to fiscal deficit, in which the United States has gone from robust economic growth to something that looks flat or even negative, where anti-Americanism has increased considerably, it is, again, a transition (where ?) the 44th president is going to inherit a far tougher situation with a far more stretched country than did the 43rd president.
It's a separate conversation, if you will, about to what do we attribute that change about why things deteriorated, but I am simply saying it's a fact of life, whoever does ultimately emerge from an electoral process that, rumor has it, will end one day, conceivably in November -- I've heard that rumor; I'm not sure whether to put much stock in it, but I have heard the rumor that this political process will one day end -- it's going to be as tough a situation as any modern president, I believe, has faced.
And I haven't even mentioned things about -- everything from the continuing threat of terrorism to the fact that he or she is also going to inherit a political system that is uncomfortable with globalization, that has become more closed in certain ways to the world and so forth. So, again, if I add it up, it's quite a daunting set of challenges.
I don't want to suggest that it's hopeless, but I would suggest that it won't simply sort itself out. And I do think that the next president, whoever he or she may be, is going to have to take some very specific steps in order to try to reconstruct a domestic consensus that's comfortable with globalization and is going to have to take some international steps that begin to address some of the global challenges we face in a way that the United States can actually sustain.
And I would simply say my last point is if we're stretched economically and stretched militarily, the one set of tools that, if you will, is not stretched at the moment are probably diplomatic tools. And so I would think that the area of greatest opportunity for the 44th occupant of the Oval Office will probably be in the diplomatic realm, again, simply because those tools are more available.
There's a lot of discretion that the executive branch enjoys when it comes to diplomacy in that aspect of foreign policy; will have, if you will, larger choices than he or she will likely face when it comes to using military force or in the economic realm, where, if I'm right, their situation is likely to be more constrained.
And with that, I will stop. This is not a filibuster.
Mr. Krull already wishes to make --
QUESTIONER: I just wonder if maybe you're entitled to even a little optimism --
HAASS: I've been accused of many things. (Laughter.)
QUESTIONER: -- after that description. What do you make of China? The Chinese project that they will have the largest economy in the world in 20 years, and their growth in military spending is actually faster than their growth of their economy. So will that line also cross? And will you see, looking out into the future, a dominant -- or a Chinese military that can actually challenge ours? And how much of a concern is that?
HAASS: Let me say a few things about China. One is, I believe it is unrealistic to project that China's economic growth will continue at its current pace. I believe it is unsustainable. More important, I believe the Chinese leadership believes it's unsustainable. So there'll be some tapering there.
They've also got massive challenges in terms of urbanization. They still want to transfer hundreds of millions of people from rural areas to urban areas. They've got a political system that is clearly, at the moment, unable to accommodate many of the pressures that are associated with and produced by high economic growth; hence the 85,000 or so protests of meaningful scale that we saw last year. Environmental questions are beginning to kick in.
So I simply do not project that China's growth is going to be double figures ad infinitum. It's just not going to happen. I also believe that one should not dismiss the possibility for political discontinuities in China; that at some point there will have to be a political adjustment to deal with some of the tensions that are associated with growth.
Plus I think it's also important with China never to forget the size of the denominator. What matters with the Chinese economy at least as much as GDP will be GDP per capita. And right now you've got to divide it by 1.3 billion, and that obviously has a tremendous impact on what you might call resource availability for Chinese projection. So simple measurements of China's GDP to me are at best incomplete, at worst distorting, when one is trying to measure China's actual capacity to act regionally and globally.
More broadly, in everything I read by the Chinese leadership that they put out, all my meetings with them over the years, I do not believe that China, to use Henry Kissinger's phrase when he wrote about Germany in the 19th century, I do not believe that China is a revolutionary power. I do not believe that China aims to overthrow the international order. I believe that China has largely decided that its own best interest is to largely integrate into the international order; hence all the economic involvement and integration that we've seen.
Now, I don't want to overstate it. I don't believe that China agrees with all aspects of international relations as they currently exist. Just to choose one area, China obviously holds a view of sovereignty which is more absolute, if you will, than our approach. China does not buy into things like the responsibility to protect. They're obviously worried that any infringement of sovereignty will be used against them, whether it's Taiwan, Tibet. It's just simply how they manage their own society.
So I believe that there are important distinctions when it comes to views of international relations between, say, the United States and Europe, on one hand, and China, on the other. But, all things being equal, I believe the Chinese leadership has made, for some time now, a strategic decision to work with the existing international order, to work with the United States to produce a largely stable environment in which they can continue to emphasize economic growth, political adjustment and adaptation, and they do not want to either trigger events or even see events come about which would fundamentally threaten that pattern. So I think, for the next generation or two, China is on that path.
Part of our goal, it seems to me, in foreign policy is to use this time to further integrate China into international arrangements so they will, for generations to come, see a larger stake in working with the evolving system than challenge it. I would say that's what diplomacy or statecraft is all about if I had to look at the long-term challenge of managing China's rise.
And if it goes well, I would say we will have at best what you might call a limited partner, that on occasion China will work with us at managing select regional and global problems. North Korea is an element of that.
China has, to a degree -- emphasize that -- to a degree played a helpful role.
We need China to play a constructive role in climate change. If we can't get China to alter its commitment to the use of coal, any steps we take in the realm of climate change will be more than overwhelmed. So if we can't get China or say Russia to play a helpful role in the case of Iran, any attempt to put together a package of incentives and disincentives is almost certain to fail.
So I would simply say it is strategically in our interests to try to integrate China into a world order that looks -- that's essentially consistent to the current one. And I believe that China is open to such integration.
QUESTIONER: Richard, would you say the same thing about a country like India vis-a-vis its galloping economic growth? You were there last week.
And to piggyback on that, is the rise of India or the hype over the rise of India -- if it's for real, because I know the nuclear deal is in deep freeze -- but does a country like India need to allies with a country like the U.S. in terms of a strategic relationship as dependent for its growth?
HAASS: I would think in India's case, the challenge to India's continued economic growth -- whatever it is these days -- 8 percent plus or minus -- is more than anything else going to be India's -- Indian politics. And it's factionalism, to use a word that our founders used, at the national level. And it's the tension between the central level and the periphery.
And India just has so many fault lines within its parties and between and among its parties -- in between national and regional, if you will, institutions. That to me is the biggest question. Whether India's political system can essentially overcome some of these divisions and rivalries.
By the way, just as an aside -- if I may plug another article in this magazine -- that's essentially the question Fareed Zakaria raises about the United States --
whether the increasingly factionalized American political system can accommodate globalization and the challenges that we face. It's interesting, because we're two large democracies. And I think it's interesting.
Now, India on top of that has the fact that it's only 60 years old and has enormous infrastructure limitations that anyone traveling from any airport in India to any city in India can attest to. It obviously faces the enormous challenge of still hundreds of millions of people living below poverty levels, real problems in rural areas and so forth. But I think India's challenge is fundamentally different.
I don't -- in terms of India -- use words like alliance. Indeed, I believe that alliances in the future will play less of a role this era of history -- that I've described as non-polarity -- than they have in the past, because what alliances tend to require are clear, predictable threats in predictable places and clear sets of obligations about what's to be done about them. I believe we're entering a period of history where tat's not going to be the case.
NATO is the perfect example -- take a slight detour. NATO for the first 40 years of its existence was a traditional alliance. In NATO parlance, focused on Article 5 -- collective defense against the common enemy: The Soviet Union and Warsaw Pact, essentially in the confines of Europe.
NATO in its current incarnation is really a collective security organization that deals with threats everywhere but Europe, for the most part, and it's really an Article 4 organization, which in NATO's parlance deals much more with the choice rather than obligations of members. And I think that sort of flexibility or uncertainty is much more characteristic of this era.
And the good news is that on occasion the Chinese or the Russians or others could be limited partners to deal with certain threats. The not-so-good news is we can't count on, quote-unquote, "traditional allies" as much as we could in the previous geopolitical context in which there were fewer centers of power that were easier to characterize. I do think this is a more fluid period of history.
So for India, the real question, again, is continued economic integration, which it's having. But the real question, I think, is internal for India. And that will be, if there's ceilings on India's emergence as a major power, I think -- really think it's largely internal.
The one exception, I'd say, is the state of Pakistan. I actually think Pakistan is a real potential liability for India in the sense that if Pakistan were ever to become -- I'm not predicting it -- but if it ever were to become a failed state or if Indo-Pakistani relations once again deteriorated to where they were in the not-so-distant past, that could be a real limit and a real distraction and a real absorber of Indian energies and resources. And that would be a tragedy not just for Pakistan, but for India as well.
In a funny sort of way, we all have a stake in Pakistan's non-failure. By we, I mean India, the United States and everyone else -- and obviously, the Pakistanis.
QUESTIONER: Richard, it seems like there's been a lot written about this -- not just kind in this particular issue, but you know, in the last couple of years with Charlie Kupchan wrote about the end of American hedge money and thought that the EU would be the kind of rising power. Now, Kishori (sp) wrote that the rise of Asia is going to be a threat to the United States.
Where do you see, in terms of state actors, challenges to kind of U.S. power? And it seems as if, you know, the perception is reality in terms of state actors challenges to kind of U.S. power. And it seems as if, you know, the perception is reality in terms of there is a perception in the world that America is losing its dominance, not just kind of on the fundamentals.
HAASS: Two things: One is, I think a lot of these people who are writing -- and there is another book that came out by the young man who --
HAASS: Yeah. (Inaudible.)
The United States -- that uni-polarity is coming to an end, that this period of uncharacteristic or unprecedented U.S. dominance or primacy -- whatever word you want to use -- is coming to an end. And I think that's largely right and I think that's widespread. Indeed, it's remarked upon at virtually every meeting I go to now.
Where I disagree with Tishora Ohibani (sp), Where I disagree with Charlie Kupchan, where disagree with --
QUESTIONER: Orikhana (sp). (Laughter.)
HAASS: If I could pronounce it better, I'd really disagree with it! (Laughter.) Is they're all trapped, I believe, in a mindset of what you might call classic multi-polarity. That almost it's the escalator or elevator view of international relations that if one power slightly losses some status, others rise. And that's what classic multi-polarity would have you believe. I believe that's outdated.
My point is not that the United States will lose some relative position and that Europe or Asia or anyone else will fill it. It won't happen that way. The United States will lose relative position, and what will happen is all sorts of others will enter the fray and that's what we're seeing. And the others will be everything from oil producing states, to Brazil's in South America or South Africa and Africa south of the Sahara to any number of countries in Asia. But also to Citigroup or Merrill Lynch when it comes to flows of dollars; or ADEA when it comes to a sovereign wealth fund; or to this or that militia in the Middle East; or this or that terrorist organization hiding out in western Pakistan; or the Gates Foundation when it comes to doing something on global health.
That is what's qualitatively different about this era. That's why the paradigm of multi-polarity is outdated. And it's important that people understand that, because the idea that, for example, we could simply remodel the U.N. Security Council -- if we ever could -- and that would somehow give us a governance mechanism for this era is outdated, because three or four or five countries couldn't manage the world situation by themselves.
Again, power is too now distributed or diffused for us to think, in some ways, about 19th century governance models for a 21st century world. We've got to adapt our thinking.
QUESTIONER: Just -- can I quickly follow up? Just on the kind of perception idea, I mean, this is like a very small example, but in India, the Taj Mahal won't even take dollars anymore. And I mean, if that was replicated around the world -- I mean, not only in terms of the dollar and the value of it -- but that is a serious threat to the, you know, perception of America and the world.
I mean -- and do you think that the actual qualitative loss of power or influence that the U.S. has is going to translate to a loss of -- not respect, but perception and fear of America? You know, the kind of feeling that countries traditionally had about America being this kind of important country.
HAASS: The movement away from the dollar in and of itself has economic consequences. It leaves us much more vulnerable to inflation, increases transaction costs for the United States. It leaves us vulnerable to economic decisions made by others.
So we lose some of the advantages or autonomy that came with the dollar being the universally accepted reserve currency.
That is a serious, serious cost, which I believe has been underappreciated by people viewing the international system. And I believe -- it's one of the reasons that I have questions about the path the Federal Reserve has embarked on. It's -- I should be careful on there, but it's not every day that I agree with the Wall Street Journal editorial. Yesterday I agreed that the Wall Street Journal's editorial. I think they're exactly right, and Ben Steel, who works at the Council has been eloquent on this subject. We have to be very careful that what we do to deal with immediate problems, such as slower economic growth in the United States, or even recession, that we don't so things, in this case, reduce interest rates, where we trigger structural changes in the international economic order. And I believe we may have done that or we are close to
Questions of American prestige and respect for the United States. I believe that there's more a chance to bounce back. I don't believe that -- I guess I'd separate it into two ways, -- sorry to go on so long -- one is anti-Americanism. I believe that anti-Americanism can be reduced dramatically either by significant policy changes, if we do this or that on climate change, or -- which all three of the candidates said they'd do. If we close Guantanamo, all three of the candidates said we'd do that. If there's progress on the Israeli-Palestinian dispute, which could happen one day.
There's a --
(Cross talk, laughter.)
HAASS: -- there's a -- all of those would affect anti-Americanism. And also what we've learned in recent years after seeing natural disasters: deliverance of aid, food stocks, whatever, bedding, in a place like Pakistan, or I think it was Indonesia, or elsewhere, the United States still has tremendous instinctive generosity and a capacity to deliver, which I believe can really reduce anti-Americanism quite quickly within particular societies. You know, what I think also -- looking at a slightly larger question, which is respect for the United States.
LISA SHIELDS: Well, I mean, if our economy goes bad, you know it seems --
HAASS: Okay, I think it's right. I guess I -- what I'd say there is -- I believe respect for the United States stems from several things. One is -- and it gets back to something Reagan talked about, the shining city on a hill -- the perception of the quality and fairness and success of American society. I mean, it never ceases to amaze me, and you -- look, you all travel as much as I do, when you're overseas how much people are affected by what they see going on here.
I remember I was overseas once at the time of the O.J. trial or other things. It's Las Vegas -- it's the opposite of Las Vegas, what happens here doesn't stay here. And so, people draw conclusions about the quality of our -- I mean, the most damning thing of the last eight years was probably after Katrina and the impact that had on perceptions of American society and competence was profound -- at least as great, if not as greater than things like Abu Ghraib, in a different way. So, I think, you know, what happens within this society makes a tremendous difference on respect, how well and how quickly our economy turns around, how competently we carry out our foreign policy.
So I believe that respect for the United States and admiration for the United States, that's pretty -- what's the word -- that can change. I don't believe that we've reached anything that's irrevocable. I really do believe there's tremendous potential to turn things around.
SHIELDS: -- and then, Sonny (sp), I just want to kind of moderate a little bit.
Q Okay. In the last debate, Hillary Clinton threw out this idea, which I don't think has gotten that much attention, this idea of, like, the U.S. throwing out a collective security arrangement to the Persian Gulf states in exchange for them not building nuclear weapons. Is that kind of idea workable in this kind of environment that you're describing there?
HAASS: Well, let's take step back. I mean, the context is, we've got an Iran that's obviously moving down the path of large scale uranium enrichment. It's not there yet, we're not exactly sure where they are. We're not exactly sure if and when they will get there. But my hunch is it'll probably happen, all things being equal, if nothing interrupts it, in the first term of the 44th president. And, that could, by the way, end up being the biggest -- the first really enormous foreign policy crisis of the next president. I think there's a decent chance that could come to pass.
It seems to me, one thing the 44th president out to do is, working with Europe, China, and above all, Russia, put together a package so called, of bigger carrots, bigger sticks for Iran to essentially try to reach a deal. Here's the limits on your nuclear program. Here's the degree of international access. And here in return are all the benefits that would stem your way. I believe we should make such an offer -- by "we" I mean the international community -- to Iran. And I say that without knowing whether the Iranians will accept it.
But the reason that I think we ought to make such an offer is I don't like the two alternatives, and the two alternatives are attacking in a preventive strike, and I'm not sure it will succeed, but I am sure the Iranians will retaliate in all sorts of ways. And I'm not sanguine about the idea of living with an Iranian nuclear, near or ambiguous, or overt nuclear capability given Iran's track record, given its statements, and given, as you suggest, Glenn (sp) the regional consequences. And one of the things that, if we do though, end up with that last scenario, if we do end up with, in a world, Iran, say, has, again, a near or ambiguous or overt nuclear capability -- and again, it's not a world I'd want to enter, if at all possible -- we will have to look at everything from providing extensive missile defense to extended deterrence and guarantees to Iran's neighbors, in part to reassure them, so they will not, in a couple of cases, think about their own nuclear program, in part, simply to reassure them so they do not feel the weight of Iranian power.
So both for proliferation reasons, but also for geo-political reasons, if you will, we will want to look at, again, missile defense, extended deterrents, and we'll probably also want to look at new declaratory policy vis-a-vis Iran.
We will want to look at specific private and public messages to Iran which we make clear what are the red lines and what would be the consequences if those red lines were to be crossed. But again, I'm simply talking about all that, not because I believe it's inevitable, but I do believe it's one of the futures we need to think about. I don't much like it, so again, my first preference would be a serious diplomatic effort. One, it might work; and, two, if it doesn't, I want to know that it doesn't before I contemplate either of the two alternatives because the two alternatives are each, in their own way, extraordinarily expensive, I believe.
So before I would have to choose or go down either one of those paths, I would only want to do it after I had satisfied myself that we had tried everything we could, and there was no alternative.
QSo you're saying what the administration has done now, so far, is not serious?
HAASS: Irwin, I would simply say it's inadequate. That I don't -- I do not believe we have tested diplomacy vis-a-vis Iran, and I believe that we should drop -- I would hope the next administration would drop the pre-condition that Iran must essentially cease all of its nuclear activity before we would sit down and talk with them; and that we ought to put on the table a much larger group of incentives. But working with Russia, we ought to also put on the table a much larger group of sanctions.
And I would simply say, at the risk of telling you more than you want to hear, this has repercussions for our relationship with Moscow. If you believe like I do, that Iran's emergence as a nuclear threat is on the short list, if not at the top of the short list, of emerging geopolitical threats to the United States and to U.S. interests in the Middle East and the world -- if you believe that, then I believe our approach to Moscow needs to be calibrated with that in mind.
And I would say such -- you know, as much as I'm unhappy with the process of what you might describe as de-democratization, in Russia, I -- we do not have the luxury of making that our foreign policy priority for this era of history. The foreign policy priority for U.S.-Russian relations for the next five years, I believe, ought to be Iran and seeing that Iran does not face us with the choice of using military force or essentially learning to live with an Iranian nuclear -- (audio break).
QUESTIONER: So it sounds like you agree with Obama's position.
HAASS: Well, I'll let you and others, Michael, characterize who I agree or disagree with -- (laughter).
QUESTIONER: You know what his position is.
HAASS: If I believe that with countries like China and Russia -- I believe that it is in the national security and foreign policy interests of the United States to try to integrate them into attempts to deal with emerging or actual geopolitical challenges, be they local, regional or global.
If the -- and in many cases, this will mean putting -- not making a priority direct efforts to influence their internal trajectory.
I believe the -- put another way, the priority of American foreign policy needs to be the foreign policy of others. The priority of American foreign policy cannot be the domestic nature of others.
This is not an all-or-nothing thing. I'm not saying we ignore what goes on in places like Russia or China, but again, we do not have the luxury of making it our priority, given these other pressing geopolitical challenges, from Iran to climate change to what have you.
And I also believe we are -- it is less difficult for me to see how we can accomplish what we want when it comes to influencing their foreign policy than it is for me to see how we can accomplish what we'd like to see in influencing their domestic trajectory.
There is no harder foreign policy undertaking than to engineer the trajectory of another country's society. We should be modest and patient about what we can do there. I do believe, though, there's an entire history of diplomacy that suggests that we can influence the way other countries act beyond their borders.
So I would again, for this next year of international relations, if I'm right in my description of where international order is heading, the challenges we face, I believe that when it comes to Russia and China, the United States needs to find ways to essentially cooperate with them on a selective basis where we can, and if that means putting on the back burner aspects of their society which we find unattractive or objectionable, I believe that that's what realistic foreign policy, or grown-up foreign policy, requires.
I'd also say one other thing. We ought to look for ways to integrate these countries economically, because over time promoting things like the rule of law within them will help us influence their internal trajectories. And I would say, in the case of Russia, I do not understand why the Jackson-Vanik legislation is still on the books.
It's 30 years old or more. Jewish immigration is a fact of life. Anyone visiting Israel can see enormous, thriving Jewish communities there of people who left Russia. The goal should be to bring Russia into the international system and to promote the rule of law within Russia.
We want Russia in the WTO. One thing I believe Congress and the new administration should do is drop the Jackson-Vanik legislation and look for ways, again, to bring Russia in, rather than keep out. It will not only -- the current approach not only makes foreign policy cooperation more difficult, but it does nothing to bring about the other goal we want, which is Russia's internal evolution. It is really self-defeating.
SHIELDS: I think -- (inaudible) -- has a question, and then Marcus.
QUESTIONER: I've got two quick --
HAASS: Mr. Gordon wishes also --
SHIELDS: Oh, I didn't see --
HAASS: -- to compliment me on many of the things I've said.
QUESTIONER: I've got a macro and a micro. The macro is what's not in this article. I'm really interested in what you didn't say, because you didn't call for a new energy policy. I mean, you didn't define a new energy policy. An energy (qualified ?) Tom Friedman or other people might have written this article and said we're not going to accept the decline of American power. We're going to re-invest American power. We're going to do something, whatever it is -- a Manhattan Project for energy, or whatever you think.
But you didn't say that, so does that imply that you think that the market'll take care of it, that it's hopeless for the state to do it, or just that that's your next article? (Laughter.)
The second is on North Korea. Did they blow through a red line, in your view? Is diplomacy still viable with them, and what are the implications for Iran? I'm sorry, I -- (inaudible).
HAASS: In terms of energy, Danita (sp), I did not write with the clarity that I should have. I do believe that -- I just gave a speech this morning to a WPO meeting here in Washington. And someone said, if the new president were to name you to his Cabinet or something, what would be your three priorities?
And I mentioned three, which would be getting fast track and negotiating a Doha Round agreement; doing what we just talked about with Iran, putting together a package, a diplomatic package with Iran; and thirdly would be energy policy. And I thought I implied as much in the -- or said as much in the article, and if I didn't, my mistake.
But I do believe that we need an energy policy in order to stop the flow of dollars to a lot of these regimes, which is bad geopolitics, it's bad economics because of climate change and so forth. So no argument there.
The way we get it, it'll probably be a -- I would introduce all sorts of new regulations, everything from -- I'd have even more aggressive CAFE standards for light trucks as well as cars. It's too bad we lost a decade on that.
I would have large federal involvement in certain types of -- welcome, Mr. Sanger. (Laughter.) On time, as always.
QUESTIONER: Are we -- (inaudible) -- a second polarity now? (Laughter.)
(Cross talk, laughter.)
QUESTIONER: He came just as you were about to talk about North Korea. (Laughter.)
HAASS: I do think there's a place for federal investment. On the other hand, I also think there's a lot going on in the marketplace. So, with -- in the venture capital world and all that.
What people really need is predictability. Every businessman I meet says you tell me the world I'm operating in. That's all I ask for. I will then figure out how to make a profit. You tell me something about the regulatory framework; you tell me something about climate change, how you're going to directly or indirectly tax carbon. Tell me all that. Then I can figure it out. So that's what I believe we need to do.
So I think it is going to be a mixture -- I don't mean to avoid your questions on it, but I think it's going to be a mixture of regulation, federal investment and subsidy, but also policy, so people have a framework in which then the market can operate. So I think it'll take a combination of all three.
We will not get to energy independence. No one should kid himself. We are not going to -- (inaudible) -- eliminate the need to import natural gas -- and, more important, large amounts of oil. But we can reduce it, and we can reduce the linkage -- and we already have -- between energy consumption and economic growth. And we can obviously reduce the amount of oil we import and consume, and that ought to be -- that's a realistic strategic goal. Independence is not a serious goal for at least a generation or probably longer.
On North Korea, it's an interesting question. I've been thinking about it too. I mean, what you clearly have is a case of the North Koreans are not complying with the terms of the agreement. I think the policy question at any one time is when you call people on it and you basically say, okay, you haven't done this, now here's the penalty.
And I think with the North Koreans -- and again, I'm not privy, obviously, to the -- what's going on privately. But I get the sense that the administration has decided not to blow the whistle yet, to give them more time to try to work it out, which suggests to me one of two things, or both.
One is they still believe there's a chance they can get North Korea to do it, or two, it's not as though they've got a great set of or-elses. And that's probably the -- and both are probably the case.
Both, though, lead me to Beijing. And I would think that this -- it's one of the reasons, by the way, I think the president -- there's lots of reasons I think the president is right to go ahead with going to the opening ceremony at the Olympic Games in August. For one -- (inaudible) -- foreign policy is about priorities. This ought to be a, if not the, priority with North Korea.
I don't think it's their parallel to Iran, in a troubling way, which is -- how do I put it bluntly? It's not clear to me there's a China vis-a-vis Iran. There's a China vis-a-vis North Korea, a country which has -- not control, but considerable influence. And I think the real question is how to persuade China to exercise all the influence it does. China often pleads poor when it comes to influence and understates what it can do.
The problem is, when it comes to Iran, is there's no third party or external actor that has the degree of sway that China enjoys and sometimes exercises vis-a-vis North Korea. That's why the Iran -- that's why Iran's a better example, actually, of non-polarity, both in how it's gotten to this point and, if it proceeds, how it will further reinforce the trends in the international system that I'm talking about.
SHIELDS: Marcus has a question, and then I think Michael Hirsh --
QUESTIONER: Can I just ask a quick follow-up to that, though? Just -- when you talk about the specific examples, it sounds like it's still going back to these different state actors.
So doesn't that, you know, kind of, reinforce the idea of it still being kind of as multipolar world, rather than --
HAASS: For two reasons not. One is multipolarity classically meant four, five, six great powers. We're talking about, not just that number of major powers, but literally several times that many countries who, on specific issues, or in particular regions, play a significant role. So, we're way past that.
But also, I mean, we recently -- we, the Council on Foreign Relations, co-hosted a meeting with the U.N. on global health issues. And it was interesting, when I looked around the table, I mean, you had Ban Ki-moon; you had a representative of the Gates Foundation and other foundations; you had representatives of the World -- you had the leadership of the World Health Organization; several health ministers; several pharmaceutical companies.
So, if you're going to deal with a problem like that, a lot of the players around the table cannot be nation-states. If you're going to deal with climate change, you had better get certain companies involved; if you're going to deal, for example, with certain types of clean coal technology.
So on some issues, yeah, it's more the province of states. But you've also got to think about black markets, gray markets, and so forth. It's not a pure world where, again, five or six countries can essentially call the shots.
Indeed, one of the -- slightly switching gears, one of the, one of the lessons of this, of the frustration with trade talks is it's, it's also very hard to corral a world of 190-odd nation-states. And we're going to have to think about smaller agreements, with smaller numbers of participants, that address parts of problems.
I think, for example, the odds of getting what you might call "Kyoto 2.0" -- a one-size-fits-all, 190-country agreement that deals with all aspects of global climate change in a meaningful way. I think the odds of that, shall we say, are exceedingly modest -- exceedingly modest -- certainly in the short-run, or medium-run.
But that doesn't mean we have the luxury of doing nothing. If one quarter of the climate change problem is caused by deforestation, why don't tomorrow we try to get an agreement with the -- involving countries that are doing the deforesting -- the Brazils, the Indonesias, and others, and other countries that have the resources to persuade them not to?
Why couldn't we simply hive off that part of the problem and address that? Why can't we simply take the countries which may be the major carbon emitters and deal with them on some aspect of coal?
My sense is -- I got in trouble, actually, in the first few months of the Bush administration -- this one, when I was giving a speech and I was asked a question. And I was -- the administration was accused of being anti-multilateral. And I said, no, we're not. The administration isn't anti-multilateral. We just believe in multilateralism a la carte. (Laughter.)
And certain newspapers then played that, with some prominence. It was a bit of a smart-ass answer, but I think it was true. But, it's true now. We're going to have to devise different forms of multilateralism, either in what you try to accomplish, or who you try to accomplish it with, to deal with this whole set of regional and global problems.
In some cases you can institutionalize it. In some cases it may be coalitions of the willing. But we're going to have to think about multilateralism in different ways than we historically have.
QUESTIONER: Mark, yeah, you had been talking earlier about the mistakes going to war with Iraq. And I now wonder, really, to what extent that has reduced the American capability of exerting power -- military power to achieve its goals? I mean --
HAASS: Well, I think it has in two ways. One is getting a little bit back at Lisa's question, it's clearly reduced some of the -- if you'll pardon the expression, "shock and awe" of American military power.
The problems the United States has experienced in Iraq -- probably, together with some of the problems Israel experienced in Lebanon, have fundamentally raised questions about advanced militaries in non-battlefields, in non-traditional battlefields.
Two other points: Secondly, it's actually a result more of the first Iraq war, not this one. One of the lessons, I think, a lot of actors in the world drew, is the one place you don't want to challenge the United States is on a traditional battlefield.
And I actually believe that one of the perverse, or unintended consequences of the success the United States experienced in Desert Storm was to think -- was to make people think more about either proliferating, if you will, above the conventional battlefield; or going below the conventional battlefield with small arms, and militias, and so forth. Because the one place you don't want to challenge the United States is head-on, with combined, advanced, conventional munitions.
Thirdly -- and this is perhaps really what you intended with your question, is, look, we don't -- we don't have an extra army. The only army we have, including the Reserves and the Guard, is largely involved in Iraq. What isn't involved in Iraq is largely involved in Afghanistan. We don't have a big pot, shall we say, or pool of spare resources. So, I believe that it diminishes the ability of the United States to credibly threaten the use of military force elsewhere. I simply think that's a fact of life.
My hunch is, over the next few years we will reduce our presence in Iraq. I think that's true regardless of who's the 44th president of the United States. I believe that we will be reducing -- not withdrawing, but we will be reducing American presence. I don't know exactly how fast, and I don't know down to what, but I think, ultimately, the debate will be over the size and role and disposition of the, of the residual force.
That said, I also think we are likely -- not on a one-to-one basis, but as we come down in Iraq, I do believe we are likely to build up in Afghanistan. Again, not on a one-to-one basis, but I do believe that, all things being equal, we will go up in Afghanistan, down in Iraq. Which will provide, though, some respite for our armed forces, together with the planned increases in American armed forces.
I think it's the goal over the next five, 10 years is to recreate something of a reservoir of American ground forces that are not involved in either Iraq or Afghanistan. And to reduce -- we've already seen the announcement about reduced duration of, you know, engagement in a -- per individual units in Iraq. So, I think gradually we will regenerate, if you will, something of a reservoir of military forces, but it will still be limited and it will take time.
QUESTIONER: Yeah, since nonpolarity hardly could have just cropped up. It must have been existing, or at least emerging during, say, the last seven or eight years. Isn't your essay basically a repudiation of the entire approach taken by the Bush administration --(laughter) -- skillfully in the first term --
I mean, I could --
HAASS: Is this a "when I stop beating my wife" question? (Laughter.)
QUESTIONER: -- I mean, I can remember you arguing in the late '90s against unipolarity; I can remember you proposing a doctrine of integration in 2002 -- all to no avail.
HAASS: Thank you for pointing that out. (Laughter.)
QUESTIONER: So if you can comment on that.
And also, I'm just curious what comments you might have on the latest instance of American weakness, which is what some economists are calling "the de-leveraging of our economy in the wake of the subprime crisis." Basically, you know, the emperor has no clothes. On Wall Street, people are just extremely leery of -- the "free ride's over," so to speak. Do you have any comments?
HAASS: On your first point, nonpolarity -- take a step back, like most, I won't say all, but like most geopolitical changes, nonpolarity's emergence is gradual, rather than overnight. So it's hard for me to -- I can't date it, if you will, but I do think it's, it's been a trend.
When I argued -- I argued against unilateralism. That was a -- even though, in a sense, I wasn't so much challenging American primacy, in my previous book, or when I was in the administration, I simply said that even though the United States does degree in -- does enjoy an extraordinary degree of advantage, that it is not in our interests, both because of the limits on our powers, and because of the nature of the challenges, for us to act unilaterally.
Unipolarity's a different argument. Unipolarity is an assessment argument. It's a diagnosis argument. It reinforces, though, the prescriptive side, which is we can't act unilaterally. I thought we were unwise to do it then. And now I believe it's simply unsustainable. And it will -- I do not believe we can succeed, in most instances, unless we bring in others. And the others we need to bring in now is a larger number, and larger range of others.
So, again, I think there's been a general movement towards a world of more distributed power. But, you're right in the sense that for some years now, I have argued that whatever the distribution of power in the world, the nature of global challenges requires us to take a more collectivist approach. And I believe that the administration erred by not doing it. I also believe the administration erred by so investing itself in Iraq. So, I think there was, if you will, two sets of errors.
On the U.S. economy, I'm not quite sure, Michael, what you're asking. In terms of the -- in terms of the subprime issue, I lost you there?
QUESTIONER: Well, it's -- it's just that, you know, we've -- the U.S. economy has had a free ride for several decades now, and we've gotten all this foreign money. I mean, you referred to it when you were talking about the dollar before.
QUESTIONER: And now, in the wake of the subprime, you know, mess, there's a -- there's a de-leveraging going on, and a decoupling, I mean, which actually, kind of, feeds into your thesis, I guess.
HAASS: Very much so. Yeah, I mean, it's interesting. Just take the last bit first. Until recently, the whole idea that the world economy was -- the prevalent idea -- the prevailing idea was the world economy depended on an American economic engine. And as America economic performance went, so did the rest of the world. Or, as the cliche' went, you know, when America sneezed, the rest of the world caught a cold.
Well, here it is, you know -- last year saw the world was growing at about 5 percent average. This year, the United States is going to -- say, we're roughly 0 percent, or 0 to 1. Well, the rest of the world is still going to be growing at about 4 percent this year. That suggests to me that a surprising degree of decoupling, and the emergence of other engines, if you will, of world economic growth.
Fred Bergsten has actually argued even -- gone one step further, saying it's the strength of the rest of the world which ultimately could contribute to American economic recovery. That, you could have recoupling -- I think was the expression he used, I don't mean, I don't want to do him a disservice -- where other engines, if you will, could help pull the United States out of something of a recession which wouldn't surprise me, because that's, again, consistent with globalization -- that the arrows don't only point in one direction, they go in other directions, and the idea that you have other centers of power.
I think the real challenge for the United States, though, now -- and this probably gets more at the first point you were making -- is what the subprime crisis has done, but in the larger context of the Fed's action on rates, of the rise in energy prices, the current account imbalance, and so forth. It has increased dollar holdings around the world to what Malcolm Gladwell would probably say is getting near atypical. And I don't think others are going to announce we are moving away from dollars. They won't announce that because they have so many dollars now, and everyone has a stake in the strength or the relative strength of the dollar. But I do think you will see quiet recalibration and de-dollaring of portfolios, not so much in the sense of getting rid of dollars, but in the acquisition of other currencies or other assets.
Essentially, other people around the world are going to put -- they're going to redistribute their eggs when it comes to financial assets. So I think, willy-nilly we're moving towards a world in which the dollar has lost its role as the unique reserve currency and it's going to have to share that status. And that will have consequences for our economic autonomy, for inflation and so forth.
MS. SHEILDS: We're going to take two more quick questions. I think Mr. Kito (sp) has been very patient and then Mr. Singer.
QUESTIONER: I tried to read into the nature and structure of the United States in this new nonpolarity world. It seems to be very unpredictable from our traditional allies' point of view. You say multi-lateralism a la carte and you also say alliance we lose much importance relationship being situational. And I have two questions. What do you expect traditional allies like Japan to behave or react to this kind of, you know, change of the nature of the leadership? And the other question is, you talk about, at the same time establishing a core group of government. What other criterion do you use to distinguish those core group?
HAASS: Good question. I do think this is a more unpredictable world. It's more unpredictable in large part because you've got more decision-makers. A world in which decisions are made by few is inherently more predictable than a world in which decisions are made by dozens. The Cold War also had an added overlay of predictability simply because of the so-called balance of power. And when two countries develop -- it's very interesting, the United States and the Soviet Union developed a fairly elaborate articulated set of rules to govern international relations. There were certain understandings. I mean, even though the attempt to codify them in the early 70s failed, to have formal rules of the road, if you remember with the Nixon-Kissinger attempt, there was an unofficial emergence or evolution of rules of the road between the United States and the Soviet Union about how competition was to be regulated or managed.
I don't think that exists now. There's far larger number of actors. The rules of the road are not nearly as articulated. So, yes, I do think it's a more unpredictable world. Look, for countries like the United -- like Japan and relationships like the United States and Japan, this is a relationship that maintains its rationale. But it's an alliance still, in a more -- in a narrow traditional sense, in the idea that the United States obviously retains its commitments to Japan. Japan still faces existing threats and, in the case of North Korea, potential threats. I think it's in Japan's interest, the United States' interest, Asia's interest, that this relationship continue. Where, though, the relationship is more questionable is when it comes -- when it goes beyond the narrow areas. And to me, quite honestly, one of the disappointing developments of the last couple of years has been Japan's politics.
I was hopeful two or three years ago that Japan's politics were going to allow Japan to play a larger role, regionally and globally. And thus far, at least, just almost parallel to the -- Japan's inability to introduce some of the domestic reforms we'd like to see, the foreign policy reforms haven't gone as far or as fast as people like me would want to see, which brings me to your last question.
I think the core group -- there's two things to get into a core group, it's capacity and willingness. At the end of the day, what matters is two things. You've got to have the means to act, but you also have to have the politics and the mindset that allows you to act. The problem, by the way, with NATO right now is you have a lot of countries that no longer have capacity. And you have a lot of countries in NATO that no longer have the mindset. That is worrisome for -- that's one of the reasons NATO is no longer a traditional alliance, as it -- as well, we're seeing some of that play out in Afghanistan. So NATO is increasingly becoming, pardon -- to use the expression -- is an alliance a la carte. That's the way NATO is.
But what I see is a group of countries, based on capacity and willingness to act. And that group may shift from issue to issue. So the Iran group may be different from the climate change group, which may be different than the North Korea group, which may be different from the trade leadership group and so forth. And my sense is that's the way -- you know, certain countries are going to show up more than others, the United States, China maybe, Europe, what have you, Japan, Russia, of course they do have capacity. The bigger question for countries with capacity will be willingness and ability to act which depends on mindset and domestic politics.
QUESTIONER: I see, thank you.
QUESTIONER: I wanted to ask you, following up on your observation that our military power seems somewhat damaged, or at least our reputational sense is damaged by Iraq and the movement to proliferation at the high end, and sort of IEDs at the low end, which I think is right. If you posited a different set of decisions just before you left the administration in which we had said double-down the debt in Afghanistan, or maybe even, decided to double-down that debt by going into the Fatah and try to deal with the whole Pakistan-Afghanistan problem holistically. Would we be in worse shape today on that power scale that you were describing or in better shape? Would we have shown that we would -- can focus on a single problem or would we still be viewed as stretched so thin?
HAASS: If I had been in a position to make decisions, which clearly I wasn't.
QUESTIONER: You were in position. (Laughter.)
HAASS: I would have done more in Afghanistan and less in Iraq, to sum it up. I would -- look, since your newspaper printed it, it won't come as a secret to you, I advocated going to war in Afghanistan. After the Taliban were ousted, I wanted a much larger international security assistance course. I wanted the United States to participate in it and I didn't want it limited to Kabul. Instead, what we got was a very small ISAF limited to Kabul with no American participation. And the initial U.S. role for a long time in Afghanistan was limited not to nation-building in Afghanistan but was limited to counterterrorism, to go after remnants of al Qaeda. So I would have done much more in Afghanistan as far as nation building in Afghanistan.
Now, what I couldn't persuade people was that, if we did that it wouldn't necessarily succeed. And that's fair. I was concerned, though, that if we didn't do it, almost certainly we would end up with the Afghanistan we got. But I couldn't guarantee that a greater nation building effort would succeed, and the bias was against doing it. And then the other half of it is Iraq.
As you know from our many conversations, I was not an advocate of Iraq. I did not think it was a war we needed to fight. I felt we had preferable policy alternatives. As you may have noticed, Mr. Sangler (sp), in your astute observational powers, I did not win that argument. And the rest, as they say, is history. But -- so, yeah, I do think that those two -- I think, again, it's harder to make the case that had we done more in Afghanistan things would've turned out better. It's one of those contrary to history things, you don't know. But I think it would've, and, obviously, I would've preferred not to have gone down the path we went with Iraq.
QUESTIONER: But to the bigger question of how our power would be perceived.
HAASS: Oh, sure. Well, again, I believe that -- look after 9-11, U.S. power actually went up because of how we were stunningly efficient and effective at removing the Taliban. That was a stunning operation after, you know, a couple of days where people got frustrated over the pace of the battle before the fall of Mazari Sharif.
Very quickly, that was stunning, and I think international respect for what the United States accomplished in Afghanistan was great so I think that was there. I think Iraq, obviously, has diminished standing, and again it's reinforced the sense -- it's raised questions of U.S. ability and willingess to contend on what you might call nontraditional battlefields. And, again, I think it's reinforced -- ironically enough, both Iraq wars in their own way have reinforced the incentive to -- either to proliferate above or, in a different sense, to move below the traditional battlefield. And that has been the unintended consequence of both Iraq wars because in both, actually, you had conventional militaries wins. On the first, we didn't press it beyond that. In the second, the administration obviously did. And its ability to translate that into a post-battlefield success has had real repercussions. And again, I think what happened in Lebanon reinforced the interpretation that advanced modern armies have trouble dealing with militias and urban or semi-urban settings.
SHIELDS: I'm afraid you have to stop. You have a meeting.
I want to thank Kate King for hosting at -- the direct by Washington program and all of you. Thank you very much.
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