The ending of empire

Two of the world's most powerful jobs are up for grabs - and America has the jitters.

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hen the latest Woutcry over gun violence fades, as it inevitably and regrettably will, the week that has passed may go down in American history for a quite different reason: as the beginning of the end of eight fat years of prosperity, and the beginning of the downward slide of the US's global dominance, both economic and military.

Such a sweeping thought may seem perverse in a season that has witnessed the US stock market beating all records, and a casualty-free military victory won with ingenious American hardware. And it is prompted by nothing more significant than a couple of job changes: one that will happen and one that is only mooted. What jobs those are, though - and what shifts they may herald.

The job that is sure to change hands is that of Supreme Allied Commander Europe (SACEUR) for the North Atlantic alliance, regarded as the second most important position in the US military. It was announced last week that General Wesley Clark, the incumbent, will leave his command earlier than planned for an uncertain future - perhaps an ambassadorship. General Clark, a spry and ascetic soldier's soldier, is not being discharged, and his term has been curtailed by a mere three months (instead of retiring in a year's time, he will leave in April). But the signal is clear.

The US administration could have followed precedent by extending his term. He is only 54; he also commanded the successful operation against Yugoslavia. Prolonging his mandate, though, or even allowing him to complete his term, would have forced the early retirement of another senior officer, the vice-chairman of the joint chiefs of staff, General Joseph Ralston.

General Ralston's four years in the US top brass are due to end next February. The rules stipulate that an officer may spend no more than 60 days between posts. Having lost his chance of promotion to the top job in the military, the chairmanship of the joint chiefs of staff, over a past adulterous affair revealed at a delicate political moment, General Ralston made it known that SACEUR was the post he would aim for. If turned down, he would retire to Alaska, as far away as possible from the Atlantic political establishments.

General Ralston, a smoothly plausible politician of an officer, got what he wanted. General Clark has accepted that he must leave early, and, for all the lavish tributes being showered upon him, there is no concealing that he is the loser.

The United States has a tradition of treating its military commanders as heroes, or making them vanish. After the Gulf war, the chairman of the joint chiefs, Colin Powell, was lionised and did not enter politics only because he chose not to. But the commander of the operation, General Norman Schwarzkopf, who played the swaggering victor, was smartly dispatched from his ticker-tape parade into private life.

In this instance, too, what separates Ralston from Clark is not years but manner and attitude. General Clark is described variously as prickly, pushy and exceptionally able. As for his commander's role against Yugoslavia, he was memorably characterised by one commentator as "a burr under the saddle for the Pentagon, the White House and Washington's European allies throughout the war". We now know enough of what went on to surmise some of the reasons.

General Clark wanted to fight a conventional war. He wanted his own land forces - not Kosovo Albanian surrogates. He wanted to scare Slobodan Milosevic good and proper at the outset by sending his bombers into "downtown" Belgrade. As he said, he felt continually constrained by political factors: the need to keep the Nato alliance together; the need to avoid casualties if at all possible, not just among Nato (especially American troops) but also on the ground, for public relations purposes.

Everything about the Kosovo conflict - its limited and incremental nature, its confinement to the air, its fundamentally political intent (to persuade and then force Mr Milosevic to do Nato's will) - was contrary to General Clark's soldierly instincts and training. It was also against the self- interest of the army.

Joseph Ralston is an air force general, with the training and outlook special to that branch. That his chosen appointment, once thwarted at home, was with Nato may hint at a more international, collaborative outlook. More obviously a politician and diplomat by nature than General Clark, less ascetic in his personal life, he may be more amenable to the constraints of joint operations, more receptive to the concept of clinical air-only wars than his predecessor was.

If, as appears, the coming change of US commanders at Nato is less of a military reshuffle and more of a change in philosophy, the same applies many times over to the other change mooted last week.

The clutch of aspiring presidential candidates now criss-crossing the country are skirmishing for every advantage they can get. But on one matter they dare not compete. In the past week almost every candidate has sung a little paean of praise to the chairman of the Federal Reserve, Alan Greenspan. From Gary Bauer on the conservative right, through to self- styled "compassionate conservative" George W Bush, across to Democratic Vice-President Al Gore, everyone is extolling Mr Greenspan as the architect of the country's prolonged boom, and - this is the point of the exercise - wants President Clinton to reappoint him this year, a year early, for another seven-year term.

This sudden clamour of support for Mr Greenspan might derive from the candidates' individual - and simplistic - belief that Mr Greenspan's very presence guarantees that prosperity will continue. Each candidate has an interest in keeping the question of Mr Greenspan's reappointment out of next year's election campaign.

Whether a candidate is inclined to spend or to save, Mr Greenspan's presence can be advanced as a guarantee of fiscal discipline. Mr Gore can cite his familiarity with Mr Greenspan as an electoral plus; Republicans can cite their support for a further term as proof of their economic good sense. Above all, no one wants to take responsibility for "losing" the talisman of economic success. Whether Mr Greenspan wants another seven years at the Fed is by no means certain, but no one wants to answer for his departure.

If Mr Clinton really wanted to confuse his enemies, he would manipulate the rules and extend Mr Greenspan's appointment now, but only until the end of his own term in office, citing his desire not to hamstring his successor. Thus the chairmanship of the Fed would become a genuine election issue. Yet Mr Clinton's interests are not necessarily served by making a decision now.

Just as the Greenspan-renewal chorus was reaching its climax last week, the US registered some of its most adverse economic statistics of the year: the rise in labour costs. The stock market fell by almost 200 points in response. The bond market shuddered. The dollar accelerated its fall against the yen and the pound, and declined even against the modest euro. But America's ever-optimistic analysts professed themselves and the markets unworried. And the delphic Mr Greenspan repeated his week- old warnings of the risk of wage-inflation in the same measured tones, the better to reassure those markets.

Suddenly, though, the US economy looks vulnerable. Indexes that were formerly dismissed as manageable - among them the record trade deficit - could loom larger in the overall calculation. The domestic budget surplus which, as Mr Clinton perpetually warns the spendthrift Congress, is mainly in the future, could prove a mirage. And the whole complex economic miracle - minimal unemployment, the vanishing welfare rolls, the record tax receipts - could swiftly dissolve, along with the consumer spending spree (built on assumed stock market gains and extravagant credit) that sustained it.

In the months that remain until the chairmanship of the Fed must be decided, the whole economic climate could change. The equation then is whether Mr Greenspan, knowing the history of the boom and its end, should be retained to limit the damage, or whether a new climate and a new century demand a fresh approach. That other talisman of economic success, the Treasury Secretary, Robert Rubin, has already left his job. His successor, Larry Summers, has yet to show whether his skill, or his luck, matches up.

Mr Clinton's reluctance so far to reappoint Mr Greenspan early suggests an inkling of this unease, a sense that a shift is in the offing here, too, which will require the United States to adapt its financial, as well as its military, might to harsher political constraints at home while joining a more collaborative world abroad.

If the twentieth century was not exclusively America's, the Nineties were surely its decade. At issue now is whether the US will try to preserve its dual hegemony as challenges mount, or gracefully seek to adapt. Those two job shifts, one now decided and one to come, hold many of the clues.

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