America as Geopolitical Risk

Any list of geopolitical risks for the next few years would include climate change and environmental degradation; Covid’s ongoing human, economic, and political costs; increased tensions between the United States and China; the uncertain future of Europe; regional flashpoints; cyberattacks; and terrorism.

But the most significant geopolitical risk may be the United States, due to the raw political divisiveness at both the state and federal levels. These divisions will prevent America from tackling urgent challenges in any bipartisan, sustainable, or predictable fashion. The result is likely to be either policy paralysis due to an unmanageable Congress or wild swings, as each administration reflexively reverses its predecessor’s decisions.

Foreign governments, multinational corporations, and global NGOs will need to include this risk in their decision-making and strategic planning—if they have not done so already. CEOs of multinational corporations, central bankers, foundation leaders performing essential work in developing countries, national security experts, commodity traders, and health care specialists will all need to adapt to the present unreliability of the United States.

This marks a change in America’s role in the world and the way it is perceived by others. Since the end of the Second World War, the United States has been the main creative force and institutional support for a liberal international order featuring security cooperation, open markets, democratic ideals, and international financial, economic, and humanitarian institutions. With its associated rules and norms, this order has provided unprecedented prosperity and stability to much of the world. Increasingly, however, the United States will be unable or unwilling to play this role.

Normalizing the “Big Lie”

No single event epitomized the dark side of American society more keenly than the January 6, 2021, assault on the U.S. Capitol Building by thousands of enraged citizens. The mob was responding to repeated claims, starting even before the November 2020 presidential election, that the results should be invalidated because the vote was marred by numerous material voting irregularities. Despite dozens of lawsuits and investigations, no evidence has emerged to support this claim. Yet on January 6, 147 members of Congress voted against certifying Joe Biden’s presidential victory. The great majority of the anti-certifiers are still in office. None has recanted his or her vote.

The Republican Party has since doubled down on the fiction that the 2020 presidential election was stolen. (Interestingly, these lawmakers did not question any of their own successful House or Senate races.) Fronted by former President Donald Trump, denial of the White House results continues to be echoed by numerous Republican leaders and candidates for public office. Perhaps not surprisingly, 70 percent of Republicans think that the 2020 election was not “free and fair.” According to a CNN poll, only 21 percent say Biden was legitimately elected President.

Fealty to the “Big Lie” is now almost obligatory for any Republican candidate, and the risk of election results being questioned is becoming normalized among Republican officeholders who refuse to accept any election result they do not like. In California, gubernatorial recall candidate Larry Elder claimed fraud even before the votes were cast. It will not be long before losing Democratic candidates play the same card.

This practice will further undermine public trust and confidence in the political process and reinforce the view that all disagreements are zero-sum, with political opponents viewed not as fellow citizens who hold differing views, but as enemies. Compromise across the aisle on behalf of shared goals will become more exceptional and trying than it already is. The corrosive downward spiral will continue: declining trust, greater societal divisions, more electoral polarization, and a diminished governmental ability to function.

The situation will likely get worse before the 2022 midterm elections. Former President Donald Trump’s presence looms large. With his PACs having already amassed over $100 million, the former President can play the kingpin by backing his favored candidates with both money and personal appearances. And in helping to win back the House or Senate for the Republicans, he will be pushing on an open door given the razor-thin majorities the Democrats currently enjoy in both chambers, as well as the historic pattern that the political party occupying the White House traditionally loses congressional seats in off-year elections.

It is easy to imagine the former President trampolining off the midterm election cycle, continuing to play an outsized role within the Republican Party, and becoming its standard bearer in 2024. For the next few years American politics and the social media ecosphere will again be treated to the fevered rhetoric, unbridled narcissism, and assault on truth that characterized Trump’s 2016 and 2020 campaigns and his presidential years. None of this will lower the political temperature, bring Americans together, or incentivize members of Congress to compromise on issues of national importance.

Other factors will contribute to this political dysfunction. Republican state legislatures are adopting new voter registration requirements that seem designed more to deny access to the ballot for certain groups than to ensure the integrity of the vote. In 2021 alone, according to the Washington Post, almost four hundred bills have been introduced in forty-eight states to “tighten access to voting around the country,” many of them echoing Trump’s “false claims that loose election laws allowed fraud to taint the 2020 White House race.” The bills would limit mail, early in-person, and Election Day voting, as well as remove protections for election workers and impose barriers such as stricter ID and eligibility requirements. The justification for these bills, systemic voter fraud, is one that most experts believe does not exist. The predictable results are more division, cynicism, and public mistrust.

Can the Social Fabric Hold?

Other indicators suggest that the social fabric across communities is fraying. A Brookings Institution article in September 2021 provocatively posed the question, “Is the U.S. headed for another Civil War?” Calling the United States a “tinder box,” the article cites a Zogby poll in which 46 percent of respondents predicted widespread civic violence. True, the poll came just weeks after the January 6 assault on the Capitol. But even discounting such a dire prognosis, the immediate future looks ominous: 41 percent of Biden voters and 52 percent of Trump voters think the United States should break up into red and blue states.

A full economic recovery may actually deepen these divides. The risk is not just that the country’s chaotic, uneven, and often belligerent response to the Covid vaccination campaign has created a tragic health crisis among the unvaccinated and led to more preventable deaths. It is that a K-shaped recovery will disproportionately benefit those with higher incomes and skills, while lower-paid earners will suffer depressed wages and educational opportunities.

Such an uneven economic recovery would accelerate America’s declining confidence in the future. The United States is already in the bottom quartile of all countries on the issue of trust; since the 2020 election, it has had another five-point drop. Less than half the population, 48 percent, now trusts the government. Faith in the American Dream has taken a similar beating. In 2000, 80 percent of Americans said they believed that you would get ahead if you worked hard. Today, fewer than half do.

Unsurprisingly, some of these social pressures have led to violence. In June of 2021, the Biden administration released the first-ever National Strategy for Countering Domestic Terrorism, which is “designed to coordinate … the federal government’s efforts to counter the heightened domestic terrorism threat.” Elected politicians are also in the cross hairs. Threats against members of Congress are on pace this year to double those in 2020.

These numbers, too, could get even worse. The 2020 presidential election produced a relatively clear victory for Joe Biden in both the popular and Electoral College votes. But what would happen in 2024 or 2028 if the result were closer, more like the 2000 Bush-Gore contest? Would the losing side accept the peaceful transfer of power? Or would some officials reject the outcome and urge people to take to the streets?

In this political and social environment, the idea of asking Americans to join together and compromise seems terribly old-fashioned, like a vintage phonograph or rotary-dial telephone. The same holds for asking Americans to make collective, short-term sacrifices for the greater, long-term good. As a country, we are unambiguously flunking the Stanford marshmallow test.

Domestic Paralysis, Global Whiplash

Political dysfunctions in American society will continue unless and until there is greater bipartisan agreement and legislative collaboration on the key challenges facing the country. That appears unlikely anytime soon. The unwillingness to engage with opponents for bipartisan goals will severely constrain what the United States can do both domestically and in the world.

Because of Congress’ inability to pass significant legislation, the United States has already entered an era of governance predominantly by Executive Order, where the policies of one President are overturned by the next President with the stroke of a pen. Donald Trump campaigned on that very promise in 2016, then overturned many of President Barack Obama’s signature policies, including the Joint Comprehensive Plan of Action (the Iran nuclear agreement) and the Trans-Pacific Partnership Agreement. Joe Biden returned the favor, reversing Trump’s executive decisions on environmental, border, and immigration policies.

This pattern of policy oscillation is likely to repeat itself. Without actual legislation, Executive Orders will last only as long as the same person and party occupies the White House. It will be challenging for foreign governments, businesses, and NGOs to make long-term investments based on such shifting ground.

Even now, with the Democrats in control of the White House, the Senate, and the House, intra-party infighting—aka “the circular firing squad”—hampers their ability to pass an infrastructure bill that enjoys wide public support. Republican Senators, even so-called moderates, showed an unwillingness to join with Democrats and support a bill to raise the debt ceiling, thereby jeopardizing the “full faith and credit” of the United States. They appeared willing to furlough government health workers—including those of the Food and Drug Administration, the Centers for Disease Control and Prevention, and the National Institutes of Health—during a pandemic that has already claimed the lives of one in every five hundred Americans. Despite a short-term reprieve, such brinksmanship can only confirm the view that the United States is mercurial and threatens others’ national and financial interests.

If Republicans win control of even one branch of Congress next year, Biden’s domestic legislative agenda will be dead on arrival. For the next two years at least, there will be no chance of legislation being enacted on a national minimum wage, tax reform and income inequality, voting rights protections, police reform, and health care expansion, among other issues the Democrats have championed.

Depending on your political preference, a lack of federal initiative on these issues may be no bad thing. But this legislative paralysis will also prevent Congress from doing any of the people’s business. This would mean further policy drift and uncertainty over monetary and fiscal policy, a modern immigration strategy meeting 21^st-century demands, environmental standards, cyber security protections, digital privacy concerns, industrial policy, and technological innovation. Indeed, the same drift and uncertainty would likely characterize a second Trump administration, with his legislative priorities blocked by Democrats.

The geopolitical risks are even greater. Paralyzed by unbridgeable domestic political differences, the United States could be unable or unwilling to lead the international order, underwrite the global financial system, or serve as overall pragmatic problem solver.

In a second Biden or first Kamala Harris term, the Republicans could continue to block all legislative initiatives, refuse to confirm nominees for government positions, and withhold funding for programs. Should Trump be elected President in 2024, he would move to undo his predecessor’s Executive Orders, as he did Obama’s. Precedent also suggests he would aim to reverse whatever foreign policy accomplishments the Biden administration had achieved.

More significantly, he would try to enact the unfulfilled elements of his isolationist “America First” vision by withdrawing America from alliances like NATO and extracting U.S. troops from South Korea and Japan. He would also re-engage with dictators and authoritarians like Putin and downplay human rights. Climate change, global health, and women’s issues would receive scant attention. Meanwhile, his erratic personal behavior and “policy by tweet” would reappear, perhaps this time with even fewer experienced Washington hands around to restrain his more emotional outbursts.

Under either a Biden/Harris or Trump administration, the broader danger is that Washington would cede ground around the world to Beijing. Without some bipartisan, domestic consensus on America’s global responsibilities, the United States would play a much diminished role in helping set the liberal international order, whose laws, rules, and norms are coming under increasing assault from China. Without the United States actively leading and enlisting allies, who will emphasize the importance of promoting open societies, protecting human rights, and defending democratic values from external manipulation? Who will help shape the global digital environment to favor “digital freedom” over “digital authoritarianism”? Who will help develop the still nascent regimes that will manage the future frontiers of genetic engineering, cyberspace, artificial intelligence, and space?

And who will backstop the global banking and financial system? In 2008 and 2009 the U.S. Treasury Department and the Federal Reserve invoked new authorities and undertook unprecedented steps to stabilize the global banking system. Only the United States could address the systemic challenges that the crisis presented. A few years later, in the eurozone crisis of 2010, only the United States could provide the trillions of U.S. dollars required to stem the threat to Europe’s overleveraged banks.

Today, as governments around the world pile up debt to rescue and stabilize their economies in response to the Covid pandemic, what will happen when these loans fall due and revenue is unavailable? Or if there is “another Lehman” whose failure sends a shock wave through the highly interconnected banking system? Again, the United States is the only state capable of steadying the global markets.

Given its current political palsy, though, would the United States be willing to lead the rest of the world through another global financial crisis? Would a divided Congress or the President allow the Treasury, Federal Reserve, or IMF to intervene as it did to save the global economy in 2008? Would a divided Congress or the President allow U.S. taxpayer dollars to help non-Americans in Europe or emerging markets? The answers to these questions were not preordained during the last financial crisis. No one knows what they would be during the next one.

Inevitable Decline?

The United States retains enormous strengths. It boasts the strongest military in the world. The dollar remains the world’s reserve currency. It has demographics on its side; it is the only great power whose population is getting younger. It has an unmatched ability to attract talent and assimilate people from around the world. It has a legal system that respects individual rights and an economic system that rewards initiative and allows people to create unprecedented wealth. Its core ethos is forward-looking and optimistic. Further, America has repeatedly shown a remarkable ability to recover and heal itself, a resiliency no other country can match. For the United States, decline is a choice, not a permanent condition or inevitable destiny. These are all reasons to be bullish on America’s long-term prospects.

But there is no escaping the anxieties, tensions, and discontent that afflict today’s United States, its citizens, and its democratic institutions. These forces will continue to constrain America’s policies, erode its soft power, and raise doubts about its behavior for at least the next decade. Without U.S. leadership, more geopolitical risk will be introduced to a world that will be less predictable and more chaotic, and less able to mobilize to address current and future challenges.

Mitchell B. Reiss is an international consultant on geopolitical risk, institutional turnarounds, and nonprofit leadership. He served as director of the U.S. State Department’s Office of Policy Planning from 2003 to 2005. This article is the first in a two-part series.

Image: Unknown author - The Earthquake Engineering Online Archive - Jan Kozak Collection: KZ128, Public Domain, https://commons.wikimedia.org/w/index.php?curid=9869