It is no different in 1998. In February, Under Secretary ofrnState Stuart Eizenstat explained our “special responsibilities”rnto the Senate Finance Committee. Referring to the “burdens”rnof American leadership, he warned that “leadership is not divisible.rnWe cannot lead on critical security issues, or in openingrnmarkets, while abdicating the lead in the sometimes messyrnwork of maintaining the international financial system.”rnWhat does this “messy work” mean for ordinary Americans?rnThe economic internationalists like to boast about individualrnAmericans reaping vast short-term consumer benefits fromrncheaper imports. With low unemployment rates in the UnitedrnStates, they foresee little negative impact on American workersrnwhen imports flood the domestic market.rnThe test of this faith will come during the second half ofrn1998, as imports soar. Imports dislocated 10-12 million workersrnover the last quarter-century, and if history holds, many unskilledrnAmerican workers will have little to cheer. Large numbersrnof them will pay for the Asian economic debacle with theirrnown jobs.rnAn Economic Policy Institute study estimates that the Asianrncrisis will have “severe economic consequences for the UnitedrnStates.” It is likely to increase America’s merchandise traderndeficit from nearly $200 billion in 1997 to $300 or $400 billionrnwithin 24 months. If so, the United States will lose fromrn700,000 to 1.5 million jobs in manufacturing and other tradablerngoods industries. The EPI study anticipates losing as manyrnas 337,468 jobs in industrial machinery and equipment,rn244,051 jobs in electronic and electrical equipment, andrn196,387 positions in textiles and apparel.rnFrom 30 years of intense import competition, America’srnblue-collar workers know full well that they pay the costs ofrnAmerica’s global leadership. Since 1970, surging imports havernravaged one industrial sector after another, forcing lay-offs andrnplant closings while suppressing earnings. Wages and earningsrnhave stagnated. While wage stagnation has many roots, mostrnAmericans believe —correctly, in my view—that cheap importsrnare a significant part of the problem.rnFor the professional class, which strongly espouses economicrninternationalism, globalization has had no apparent downrnside—yet. Professionals—like college professors—are generallyrninsulated from the cold winds of global competition, or havernthe skills to adapt easily to new opportunities. The result is arnmore skewed pattern of income distribution, with the top fifthrnof families increasing their share of total income from 40.9 percentrnin 1970 to 46.5 percent in 1995. All other quintiles havernexperienced a decline in their shares, according to the U.S.rnCensus Bureau.rnNo wonder so many middle-class Americans have grown disenchantedrnwith the American political system, and cast presidentialrnvotes for Ross Perot, Jerry Brown, and Pat Buchanan inrnrecent presidential elections. Public opinion polls show that arnmajority of Americans soured on free trade 30 years ago, at thernend of the Kennedy Round. But the majority in Congress didrnnot awaken to this reality until the NAFTA debate in 1993rnmade free trade votes radioactive.rnFour years later, in the autumn of 1997, trade skeptics finallyrnwon a key round, and their bipartisan victory ricochetedrnaround the New World Order. Congress declined to surrenderrnmore trade negotiating authority to the White House, votedrndown a proposal to extend NAFTA benefits to Caribbean Basinrncountries, rejected $3 billion in funding for the IMF, and refusedrnto pay money supposedly due to the United Nations.rnThese setbacks did not discourage President Clinton andrnWall Street. Having committed a half-century to creating thernNew World Order, economic internationalists had no dispositionrnto abandon their agenda without more political combat.rnCorporate America’s response to Congress’s declaration of independencernwas an unusual demarche. It carried the signaturesrnof two ex-Presidents (Jimmy Carter and Gerald Ford), two formerrnSecretaries of State (Warren Christopher and HenryrnKissinger), two ex-chairmen of the Federal Reserve, and 100 ofrnthe corporate elite. Buying two full pages in the WashingtonrnPost and the New York Times, they demanded “American leadershiprnon key global issues.” They insisted that Congress fundrnthe IMF with $18 billion, pay another $1 billion in back duesrnto the United Nations, impose no restrictions on the use of thernTreasury’s $40 billion exchange stabilization fund, and approvernnew “fast track” trade negotiating authority to help PresidentrnClinton “maintain, strengthen, and expand market-openingrninitiatives.” In effect, this elite group sent a blunt message torngrassroots democracy: don’t interfere with the global market;rndon’t challenge America’s global leadership responsibilities;rndon’t mess with the United Nations system.rnSuch bulldozer tactics may prevail in the short run. But protractedrninstability in Asia suggests that the financial crisis wasrnneither an aberration nor an isolated incident. It is part of anrnemerging pattern of vulnerabilities that surfaced in the earlyrn1980’s and intensified after the United States and Western Europernderegulated financial markets and embraced the NewrnWorid Order.rnParadoxically, the IMF, the designated vehicle for rescue operations,rnhas exacerbated problems with cookie-cutter solutionsrnintended to hasten the spread of global financial markets andrnharmonize standards. The Asian crisis erupted in July 1997 afterrnthe IMF publicly counseled Thailand to allow some currencyrndepreciation. This advice raised questions amongrndebtors in Thailand about the government’s continuing commihnentrnto a fixed exchange rate with the dollar. Not surprisingly,rnlocal banks and companies with dollar debts promptlyrnbegan buying dollars, turning an orderly depreciation into arnrout.rnIn November, when the IMF insisted on higher interest ratesrnin Indonesia, a similar panic ensued. This set off a flight to safetyrnthat crippled the banking system and had disastrous socialrnconsequences—panic buying, hoarding, food and race riots,rnand strikes. Later, the I M F conceded its prescriptions hadrnbackfired and attempted to modify the adjustment program.rnFrom an historical perspective, it is ironic that the New WorldrnEconomic Order, the brainchild of cerebral internationalistrnlawyers and economists, has proven so brittle and vulnerable.rnWith the memory of earlier economic crises—the Great Depressionrnand the economic nationalism that preceded WorldrnWar II—on their minds, these internationalists set out duringrnWorld War II to build the structure for a more stable internationalrnsystem. Under the United Nations’ flag, they created thernBretton Woods institutions (the International Monetary Fundrnand the World Bank) to address exchange rate and paymentrnissues, and pressed for a World Trade Organization to facilitaterntrade liberalization.rnThe incremental internationalists argued that nations mustrncede some sovereignty in order to avoid the types of politicalrnand economic instability that ignited the last global war. Torncontain dysfunctional nationalism, they proposed to create arnJULY 1998/27rnrnrn