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Jewish World Review June 16, 2005 / 9 Sivan, 5765

Amity Shlaes

Amity Shlaes
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Why is Bush so stingy? | After all, the U.S. president owes the British prime minister. Tony Blair joined him in the unpopular Iraq war as others fled. "Yes, Tony," should be the reply that comes from Washington to any big request after that stupendous gift.

Sure, the pair concluded a recent agreement on debt relief— international organizations will cancel the debt obligations of 18 countries. But that move still leaves Blair standing alone on two topics dear to his heart: expanding aid to poorer countries and global warming. The risk is humiliation at the forthcoming summit of leading nations in Gleneagles, Scotland. In the minds of news editors, the headline is already written: "Bush shames Blair in Scotland as Putin watches!"

But the headline is too harsh.

There are reasonable explanations for President Bush's behavior. Overall, Bush is disagreeing with Blair not because he is a poor friend but because he is a good one.

Consider the reasons for disagreement. Yes, during war Bush is the commander in chief, but the three-branch system is still the law. Even if Bush wanted to go along on more extensive aid, Congress might not go along. The same holds true for regulatory concessions on global warming. The Senate punished President Clinton for daring to consider the Kyoto treaty by voting overwhelmingly against the very concept of the treaty.

But there are deeper reasons why Bush will not back Blair. The U.S., along with other countries, has signed a declaration to increase aid to 0.7 percent of gross domestic product, something like $80 billion in the American case. Other countries have criticized the Bush administration for not producing a plan to show how it will meet that goal. But the administration believes that democracy is the best form of aid in the long run, and that it is in Iraq or Afghanistan to bring about democracy. It believes these things so strongly that it is willing to send soldiers to corners of Iraq and Afghanistan from which even the most courageous aid groups have already withdrawn. The Senate recently passed legislation for additional military spending. The amount of that spending was $80 billion. In other words, Washington is doing its part.

The second reason for Bush's hesitation, at least when it comes to government-to-government aid, regards efficiency. Since Sept. 11, 2001, a pious conviction has overcome the developed world. Its belief is that because the stakes are now higher (Al Qaeda, tsunamis), the failures of aid may be ignored. In the case of Blair, the view seems to be that it is un-Christian—i.e., unforgivable—not to spend more on aid.

But here Bush, so disparaged for his emotional displays of faith, is acting rather logically. He is demonstrating awareness that Sept. 11, for all its horrors, cannot fix the essential flaw of state aid: that governments use it for purposes for which it is not intended. "When the World Bank thinks it is financing a power station, it is really financing a brothel," as Paul Rosenstein-Rodan, the great economic scholar, once put it. In his first term Bush therefore created the Millennium Challenge, according to which the U.S. would give more only if there were concrete improvements in donor countries.

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An illuminating report, "Aid and Development: Will it Work This Time?" published by a network of international think-tanks—including African ones—provides support for Bush's position. Fredrik Erixon, its author, systematically reviews aid projects of the last half century and finds that heavy aid has correlated with slower growth in Africa.

In other words, everybody is being consistent. Bush is not going along with Blair in regard to aid because he does not agree with him. Blair went along with Bush in regard to Iraq because he did agree with him. In Britain, the general assessment is that Blair looked the fool because of later revelations about Iraq's nuclear capabilities. The conventional wisdom also holds that Blair must pay because the Iraq outcome hurt the Labor Party in recent elections.

In American eyes, by contrast, Blair's willingness to defend unpopular positions means that he ranks even higher. Indeed, some Americans rate Blair above Bush. When the Pew Research Center polled citizens in May, it found more Americans believed that Blair would "do the right thing" in confronting an international challenge than believed Bush would.

In short, the Blair-Bush alliance is not born out of mutual weakness but rather out of mutual strength. Bush and Blair are friends because they have something in common: They both believe in principle. Is that not the strongest kind of friendship?

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JWR contributor Amity Shlaes is a columnist for Financial Times . Her latest book is The Greedy Hand: How Taxes Drive Americans Crazy and What to Do About It. Send your comments by clicking here.



© 2005, Financial Times