It is hard to argue with the White House's reasoning behind working collaboratively with other nations in formulating the response to the Libya crisis. But, if the president is going to talk the multilateralist talk, the crucial question is going to be whether he does so effectively or not.

Obama's multilateralism is both ideological and pragmatic. Since his first days as a candidate, he has made it clear that he believes in the international rule of law, support for international institutions and a United States that is a committed partner rather than a unilateralist rogue within the international system. On the practical front, the U.S. public has neither the appetite nor the checkbook for a sequel to the series of with-us-or-against-us-themed American Sherriff road movies that recently have been playing to such mixed notices in Iraq, Afghanistan, and Pakistan. (In both instances while we have worked with coalitions, the U.S. role has been so great that other nations have really been extras, featured ensemble members at best.)

So the president has shown reasoned restraint in the wake of the outbreak of civil war in Libya. While the plight of citizens on the ground cries out for support, Obama and his team have felt that given both the complexities associated with widely bruited-about "solutions" like the imposition of a no-fly zone as well as other interventive measures, that whatever is done would be both more legitimate and more sustainable if undertaken through collective initiative.

That seems like a sound approach -- if intervention actually takes place. But the president and his team must not fall into the trap of thinking that embracing multilateralism excuses inaction when decisive measures are called for. The United States still has national interests -- whether they are in maintaining oil flows or preventing a humanitarian disaster or discouraging other thugocracies from brutalizing their own people -- and if it is the choice of this administration to advance those interests through collaboration with our NATO allies, via the United Nations or through some ad hoc coalition then the United States must find ways to actually do so and to do so in a timely, resolute and ultimately successful way.

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The problem with experience is that it doesn't prepare you for what you have never seen before. This is also a challenge for experts, for whom their knowledge of the past is usually an advantage, but sometimes can be their worst limitation.

This has certainly been the case in the past several weeks with the events in Tunisia and Egypt. Old Middle East hands approached the matter with great caution, fearing instability, because if it followed past patterns, it would most likely end in unhappiness. The most likely outcomes they could foresee were either: the further cementing of the status quo or an invitation to something much worse.

History taught them that popular uprisings in the region typically led either to replacing one despot with another or perhaps to trading the evils of autocracy for the evils of theocracy.

And we would do well to consider the fact that even now, as Egypt is awash in euphoria, that the experts may be right. And they would do well to consider that perhaps what has happened in Egypt is something entirely new.

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President Hosni Mubarak's speech to the Egyptian people in the wake of days of rioting was a masterpiece of insensitivity. With his citizens in the street expressing their needs, he addressed his own. He spoke of poverty and concern for his people, but his message was something far darker. He was making a stand for the status quo.

Watching him, ghostly in the stark podium lighting designed to hide what hints of his age his hairdresser and doctors could not, it was clear that this was an old man comfortable in the old ways of the Middle East. As such he was as much a remnant of Egypt's past leadership as any mummy in the Egyptian Museum of Antiquities in Cairo, just as brittle, frail, and ready to turn to dust.

His sacrifice of his cabinet also evoked ancient practices, as well as the last ditch measures of autocrats throughout history. His ministers -- many of whom were not objects of the people's anger -- were used as cannon fodder, a way to test whether the old president's position would hold. The hours and days ahead will determine whether it was enough: whether there are real reforms he might actually entrust his new government with or whether he is betting that his lifelong ties to the military will protect him in ways that his political savvy no longer can.

He is a man out of touch with his people and his times. Like Zine al-Abidine Ben Ali in Tunisia, he is a symptom of the greatest problem the region has faced over the past several decades: its self-absorbed, corrupt leadership. From Algiers to Kabul, an arc of autocracy extends across nearly all of the greater Middle East, denying citizens the right of self-determination, buying international favor with oil or political deals, ignoring educational needs, the rights of women, and the investments needed to compete in the global economy.

But with each starkly out-of-touch pronouncement like that from Mubarak today, the arc trembles a bit. Certainly, the fall of Ben Ali started it quivering. In Yemen and in Jordan, demonstrators tested the waters to see if progress might be made there. We have already seen the potency of the Green Revolution in Iran and recognize that even when the autocrats seem to win the day, they only postpone the inevitable. You can't keep the cell phones and the Internet and Twitter accounts off indefinitely and compete in the modern world. You can't deny a future to populations dominated by the young and expect enduring stability.

In Israel, leaders are deeply ambivalent, fearful of instability in a country that has been vitally important to the region's stability -- and even more fearful that what they perceive as an even weaker, minority regime in Jordan might totter. At the same time, on some level they cannot help but note that not only do these uprisings underscore their nearly unique role as a democracy in the region (we will see what reform in Iraq brings) but even more importantly, they illustrate clearly that Israel is far from the biggest problem the region faces.

It is tempting for "realists" everywhere to cling to stability over the questions that opening these countries to self-determination might raise. But we should all have long since passed that point of hesitation. Either we are for the principle or we are not. Either all people deserve these freedoms or they do not. Someday historians may draw a direct connection between President Barack Obama's call for reforms and a new relationship between the United States and the people of the Islamic world in his Cairo speech and the events of this winter. We can only hope that it is connection marked by U.S. actions that are consistent with the high ideals espoused by the president.

In the words of Secretary Clinton today, we have hope that will be the case. In the "Made in the U.S.A." marking on the tear gas canisters being used against the Egyptian protestors we see the potential ugliness that can come from that old-fashioned form of flawed pragmatism that is a hallmark of US foreign policy -- the form in which we make a deal for today's stability that puts us on the wrong side of tomorrow's revolution.

If one of the secrets to success in any job is choosing the right predecessor, then Dilma Rousseff may be starting out with one strike against her.

Her current boss and political champion Brazil's President Luiz Inacio Lula da Silva could well be the toughest act to follow anywhere in the world. Despite the efforts of some commentators to take him down a notch or two (much like young guns in the old American west who used to try to boost their reputations by going after the fastest gun in town), Brazil's charismatic president has done a remarkable job. Confounding -- and consigning to the trash heap of history -- old distinctions between left and right, Lula has overseen an economic boom, major social reforms and the elevation of Brazil's standing to the top ranks of nations in the world. (See the excellent story in today's Latin Business Chronicle ... rapidly becoming required reading for anyone interested in Latin America ... summarizing Brazil's recent economic accomplishments. It's pretty dazzling stuff.)

The question is: What's a girl to do? Dilma, who almost certainly will become Brazil's first woman president -- despite a recent slight slip in the polls due to a scandal that doesn't in any way implicate; her one of those curiously timed dust ups that happen to come to light in the weeks before an election -- is going to inherit a country with very high expectations. Some critics expect that absent Lula's extraordinary gifts that she will falter. But read her story and you discover an exceptionally accomplished, tough as nails, politically canny, professional manager who will come to office much better prepared and equipped than some other leaders who have taken over major powers recently.

In fact, given that a centerpiece of her tenure will be the efforts to tap the enormous oil reserves off Brazil's shores -- thus making Brazil a major petropowerhouse -- her background as former energy minister is ideal. The fact that in that capacity she chaired Petrobras, the state's oil giant that recently completed a massive financing that made it the fourth most highly capitalized company in the world, gives her much more business understanding than many political leaders ... even if her views on the national responsibilities of that company make some market purists uncomfortable.

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Once again, America's political pundits got it wrong in their analysis of this week's primary elections in the U.S. They immediately sounded the alarums regarding the big Tea Party wins, focusing on two of the most bizarre and extreme candidates to recently win victories -- Delaware's anti-masturbation advocate Christine O'Donnell and New York's porn-loving gubernatorial cartoon Carl Paladino. In so doing, they missed a far greater threat to the U.S. that was imbedded in the election results -- the success of the teachers' unions in defeating Washington, D.C.'s reformist mayor Adrian Fenty.

The unions didn't like his tough schools Chancellor Michelle Rhee and her policies holding teachers accountable for their students' performance. So they poured money into the campaign of Fenty's opponent, D.C. City Council Chairman Vincent Gray. The spin on the election was that Fenty lost touch with the city's black voters, but behind the scenes it was another victory for special interests that care more about their job security than they do about America's economic future. The side that seems dedicated to ensuring that the U.S. continues to fall behind other countries in academic performance -- and thus in terms of competitiveness, growth and by extension, national security, scored a big victory … if anything so cynical and counter-productive could actually be called a victory. Sadly, within hours of this setback for education reform in the nation's capital, it became clear that another courageous reformer -- with Rhee, one of the two or three most notable in the country --, New York City's Department of Education Chancellor Joel Klein, was also under growing pressure to suspend some of his trail-blazing accountability practices. The argument the critics made was that some New York City students were underperforming on one measure of English and Math proficiency, even while they conveniently overlooked a wide variety of national and state-level achievement gains made under Klein's stewardship. They also ignored the fact that the areas in which the setbacks occurred were ones in which standards were only this past summer revised upward (as Klein himself had urged for a long time).

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This weekend the Obama Administration will send a team to China headed by the somewhat unlikely duo of Larry Summers, head of the National Economic Council, and Tom Donilon, deputy national security advisor. The purpose is to send a clear message that the U.S. is approaching its relations with China strategically, with a view that integrates the full range of economic and security concerns.

While such trips are old hat for Summers, the journey represents a bit of a change of pace for Donilon, the inside guy who is credited with having done a great job making sure the policy process trains have been running on time within the National Security Council. Some in Washington are buzzing that this is a profile- and skill-raising trip intended to make Donilon a better candidate to replace National Security Advisor James L. Jones should Jones decide to depart, as many expect he will. Others grumble that the trip represents precisely the kind of "operational" role for the NSC and NEC that many cabinet departments have long thought should be out of bounds for White House policy coordinators.

But beyond the Washington gossip the trip has caused, the juxtaposition of economic and security concerns offers an illustration of an often over-looked fact -- the centrality of economic issues to current U.S. national security concerns. In China, the tricky calculus is fostering collaboration on security issues from North Korea to Iran in the face of political pressure back home to press Beijing harder on issues like currency valuation and unfair competitive practices (especially those associated with pressuring foreign firms to transfer proprietary technologies).

The U.S. has never been especially effective at coordinating its multiple interests in China so that pressure in one policy area produces progress in another -- or even simply avoids causing setbacks. So this trip, in concept at least, represents a step in the right direction -- at least if Congress doesn't undercut the administration's efforts by, for example, drafting its own legislation on currency issues.

But China is just one of a host of current hotspots where Summers, Geithner, and the international economic team are playing a central role on national security issues.

For example, in Afghanistan, the story of the week turns on the amazingly brazen behavior of the Karzai gang in trying to pressure the United States into bailing out a clearly corrupt and mismanaged bank in which President Hamid Karzai's brother, Mahmood Karzai, is the third largest shareholder. Mahmood has publicly called for a bailout even though his affiliation with a bank through which U.S. funds flow to Afghan security forces compromises both him and the president. Both remain unabashed, however, behaving like the proverbial kids who murder their parents and seek the mercy of the court on the grounds that they are now orphans. So the United States is in a pickle: Step in and support the Afghan kleptocracy and its culture of corruption or stand on principle (and law), and run the risk that the bank falters. It's not a situation that General David Petraeus can handle, but how the economic team manages it will have direct ramifications for him.

In the same way, some of the most sensitive concerns regarding Pakistan turn on economic policy. Will the Zardari government pump too much cash into the economy to deal with the aftereffects of the devastating flooding, and risk a major inflationary episode? Or will it introduce price controls and a set of micro economic measures that, if mismanaged, could produce social tensions or even rioting? The wrong mix of policies could plunge the already fractured and battered country into political turmoil and perhaps the reintroduction of military rule.

In talks with the Israelis and the Palestinians, many of the core concerns will turn on how to improve the economic conditions for the Palestinian people. If they can get past initial hurdles, they will, of course, ultimately have to move to a state structure that will enable organic economic growth in a Palestinian state, actually fostering job and wealth creation for people who have lived in an economic no man's land for too long.

In North Korea, it is reported that the administration, conducting high level meetings on the subject this week, is seeking to explore "engagement." In the case of the economically isolated and struggling North, that inevitably will mean economic packages in exchange for gradual normalization of relations or reductions of threats.  At the same time, this week, the administration widened sanctions intended to force Pyongyang to give up its nuclear weapons.

In Iran, the core initiative at the moment is making targeted economic sanctions work. In Iraq, the issue is fostering economic growth to help "purchase" social stability. The list goes on. It is clear that wherever the stakes are highest for the United States in the world, even as military and diplomatic initiatives garner most of the attention, behind the scenes much of the most critical work is being undertaken by international economic officials.

It is interesting to note in this respect that the responsibility for conceiving and coordinating most of these activities lies in the White House to a much greater degree than it does with military or diplomatic initiatives. The White House team on these issues is excellent. But in the end, these functions are so fundamental that the real leadership capabilities need to be cultivated elsewhere.

The economic team at the State Department could and should play a greater role in this respect; Undersecretary for Economic Affairs Robert Hormats is a talented and experienced official. As I have written before, State also could and should develop a dramatically enhanced capability when it comes to emergency economic intervention -- pre- or post-crisis. And all the other economic agencies need to be prepared to collaborate on this, not on an ad hoc basis but through a permanent program promoting cross-training and what the military might call inter-operability. Call it an economic rapid response capability -- or call them economic green berets.

We need people we can drop into critical situations and help manage them with an eye to our security and political needs rather than traditional purely economic metrics. That's a critical role for which development officials are ill-suited, and we still don't really have the fully developed institutional structure we need to support it.

Looking at the issues faced by the United States today, while one can't help but admire much of what is being done, the strategic side of the international economic agenda is such that it warrants some real thought about how and with whom we should be meeting such challenges in the future.

In yesterday's post, I noted some of the most relevant developments in the political world that've occurred recently. But we're hardly out of the neck of the woods. The summer of 2010 promises to be an ... interesting time.

As promised, here's an idea of the potential Black Swans to come:

1. Wars of Summer, Part I: The Koreas

As we've seen just in the past couple of days, "engagement" doesn't seem to be doing the trick with North Korea. When you have two countries that have been pointing guns at each other for half a century and one of them is run by the kind of guy who makes Mahmoud Ahmadinejad look like Albert Schweitzer trouble is always just a Dear Leader moodswing away. When one of those countries starts firing torpedoes at the other, that raises the temperature a bit ... and when that same country has a diplomatic tantrum because its neighbor actually doesn't like having its ships sunk, you get a sense of how off-balance and dangerous the whole thing is. (You also get dictionary editors everywhere rushing to insert North Korea's reaction into the official definition of chutzpah right where "burying your husband in a rented suit" used to be.) While most people assume this is just one of those periodic Korean peninsula hiccups, you never know.

2. Wars of Summer, Part II: Somalia, Yemen, etc.

These places are just two examples of plenty where conditions are chronically horrible and getting worse. If you're going to worry about the Koreas where the stakes are high and both sides would pay an unimaginable price for a conflict, don't rule out conflicts in places where everyone has a gun and life is cheap.

3. Wars of Summer, Part III: Israel, Syria, Lebanon

Speaking of places not to rule out, over the years few places have proven themselves more reliable breeding grounds for warfare than the borders of the state of Israel. And tensions are rising along the most northern of these as we speak. The Israelis are worried about growing stockpiles of missiles being deployed in Lebanon, new missile capabilities in Syria and Iranian mischief in both places. Of all the possibilities for tensions turning to a shooting war this summer, this one may top the list. And, what a great distraction it would make from Iran's nuclear issues (or what great cover for an Israeli strike against the Iranians who are paying for the missiles and underwriting Hezbollah trouble-makers in Lebanon and elsewhere).  

4. The Other "Big Spill"

While Washington works itself up into a lather over the spill in the Gulf, it effectively ignores a much bigger catastrophe. A recent NPR report indicated that the amount of man made pollutants that have flowed into the Gulf during the current crisis flow into the air every 2 minutes or so. That's 30 crises like this an hour. 360 a day. Over 1,000 a month. That means this summer there will be 3000 crises like this offshore drilling calamity ... and throughout this period the likelihood that the U.S. government or the world move any closer to addressing this much larger, much less photogenic disaster is pretty close to zero.

5. The Financial Crisis They Call "The Big One"

Remember the financial crisis that took down Bear Sterns? Now we look at that as only prelude. Remember the one that took down Lehman, Merrill and AIG? Perhaps we'll look at that as just the appetizer. Because with the world economy now trembling at the thought of further deterioration in the Eurozone, it wouldn't take much to send us into territory that was unimaginable even two years ago. Likely? No. But possible? Well, let's see, Japan has a debt to GDP ratio that is worse than most of Europe's. What if the markets sour on lending them any more money? What if that takes down some of their banks and they start calling in IOUs and cut lending in places like China? Tim Geithner said this week that overall China's economy is not a bubble. Maybe so. But that doesn't mean it doesn't have some pretty big bubbles in it (see: real estate). 

6. The Dem Rebound

The big political story in the United States is supposed to be the losses Dems will suffer in mid-term elections in November. Big time members of the punditocracy are calling for a big swing to the right, a likely Republican take-over in the House and even the possibility of one in the Senate. But by the end of the summer, once campaigns have started in earnest, the loony, fringy, dysfunctionality of the "just say no" party will be revealed and the big surprise U.S. political story of the year will start to take shape. The Dems may have modest losses in November, but it won't be anything like the washout the chattering classes expect.

7. Argentina's Surprise Victory

Despite Lionel Messi's dominance on the soccer field, Argentina won't win the World Cup this year. That'll be Spain. But maybe as the summer ticks on a few more people will start to realize that having done everything wrong and utterly alienated the financial system by telling the big banks to take a hike a few years ago, Argentina is actually having something like a recovery worthy of a tango. Oh, all is not rosy to be sure, but take a look at its per capita GDP in purchasing power parity terms. It just passed Chile to be number one in Latin America (according to Latin Business Chronicle). Between this and the U.S. dollar strengthening despite the fact that the U.S. has also done practically everything wrong (and China's flourishing for years despite its penchant for, how shall we put it, well, communism) who knows... this could be the summer that moral hazard makes its long awaited big comeback.

8. Someone Writes the Truth About Financial Reform

This is the least likely black swan on this list. But it is possible that once financial reform passes later this summer and is signed into law that someone will note that "the most sweeping financial reforms since the Great Depression" actually don't amount to much when it comes to fixing the problems we face. Mortgage defaults, unregulated global derivatives markets, unintended consequences of interconnectivity of markets, lack of global regulatory mechanisms, failure to address the trading culture's perversion of finance, etc... this is like the health care bill and Beatlemania: not the real thing, just an incredible simulation.

9. The White House Gets Humble

Ok, maybe I'm wrong. Maybe this is the most improbable of the Black Swans. But the folks in the White House are good people at heart and smart ones. Sooner or later they will realize that their mixed, incomplete record in office trumps the historic nature of their victory and that a little humility is in order ... if not because they feel that way then because by alienating even their most enthusiastic supporters they are doing themselves great political damage. As for the American people, they would do better with more realistic expectations. We all want Washington, Lincoln or Roosevelt whenever we elect a president. But the vast majority of the time we get Chester A. Arthur. Bush was Chester A. Arthur. Clinton was Chester A. Arthur. And in all likelihood Obama will end up being Chester A. Arthur.

10. Iran Cooperates

Ok, never mind. This one is most likely. But the dangerous twist here is that cooperation from Iran is actually just them buying time to move toward their goal of possessing nuclear weapons technology. The only thing that will stop them from such a stalling course is if they are much further ahead of schedule than we think and that the big black swan of this summer will be the announcement that the world's largest state sponsor of terror will actually have gone nuclear.

The most important outcomes of the G20 Summit had to do with symbolism, process, and the evolution of international ideas. The specific actions taken were less important and, as we will likely see, less significant than they could or should have been. The monies allocated to the IMF represent a good step in a healthy direction and will help the neediest nations but do not address the larger growth issues associated with the world's largest economies, the ones that created the crisis and will lead the way out. As for those economies, commitments to stimulus were soft and the follow-through on them is destined to be spotty. The regulatory steps outlined -- focusing on hedge funds, bank secrecy and executive salaries, for example -- don't cut to the core issues associated with risk-laden global derivatives markets or the other larger causes of the recent crisis and they fall far short of the global regulatory structures we will ultimately need to manage truly global markets. And it is unclear just how much of the $250 billion announced for trade finance is actually new money. 

But just as it would be wrong to overstate the specific outcomes of the meeting, it would be wrong to dwell on the output of one such meeting or the fact that it did not produce every desirable change. The reality is that the meeting is meaningful on many levels. It was sufficiently productive and harmonious to suggest that the G20 may be the vehicle of choice for high-level international economic policy coordination at least for the foreseeable future -- certainly through and likely beyond the next meeting, already scheduled for the fall on the edges of the UN General Assembly meeting in New York. Not only was the outcome moderately substantive but it afforded leaders like President Obama an efficient means of interacting with all his key counterparts on a wide range of issues. This de facto ratification of the idea of adding the largest emerging economies to the steering committee for the global economy is important as is the semi-official recognition that henceforth when the United States and China meet, they comprise the G2. Related to this, the acknowledgement that emerging powers require more voting authority within international institutions is a good and meaningful step and reflective of longer-term changes that indicate a shifting global balance of power.

That said, among the other symbolic outcomes of the meeting worth noting was the reassertion of America in a leadership role that was broadly accepted and indeed encouraged by other participants. Obama may not have gotten just what he wanted in terms of specifics on global stimulus and Gordon Brown may have announced the end of the "Washington Consensus," but contrast the reaction to this U.S. president to that to the last -- and contrast his tone and that of his senior aides. It was night and day and, make no mistake, the Obama era is the one shining more brightly in the eyes of the international community.     

As for the evolution of ideas, the meeting further solidified the sense that hyper-capitalism and unfettered markets are things of the past. So, too, is the idea that economic problems are national problems. Brown, who has had a rough few months and for whom the event should be seen as a considerable achievement, referred to the indivisible nature of our economic interests and fates. Does this mean we should now believe that the G20 leaders are more committed to, for example, open trade than they were the last time they professed such views? Of course, not. National politics will continue to bedevil international coordination for the foreseeable future. But it does mean that meetings such as this one will be a fixture throughout that future and that, more than anything else achieved in London, is a net positive of the most profound sort.

In conclusion, it can be said that meetings like the just-concluded G20 work more on the level of metaphor or political theater than they do as functioning working sessions. And while this one may have come up slightly short or individual leaders may have gotten slightly less than they wanted on one issue or another, we shouldn't miss the really primary outcomes in terms of messages. And those are that the world sees itself very differently than it did just a year ago, that there is even among very different countries evolving agreement about what has changed and that this will have significant repercussions for many years to come.

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