The Imperious Economy:

...And the Democrats are look-ing for an issue to use in 1984.an issue to use in 1984...

...Though the immediate economic con-sequences were beneficial, Mr...

...This is an ironic statistic, consid-ering that Europeans have long be-moaned American hegemony, and just as long refused to pay a greater share of their defense costs...

...and NATO, a temporary alliance in which the United States would contri-bute the lion's share of security, so that European nations could revitalize their economies without being burdened by defense costs...

...Calleo reasons, "Ameri-can world leadership had encouraged the very evolution that led to its relative de-cline...

...Only the United States emerged from the Second World War stronger than when it had entered...

...By withdrawing six of its ten divisions from Europe, the United States would save $30 billion an-nually within three years, reducing the American deficits that Europeans con-tend cause global stagflation...

...It ushered in the Marshall Plan to finance an economic resurgence that would stymie the Com-munist party in western Europe...

...Last year the United Stastes contributed $81.1 billion to the Atlantic Alliance-more than half the American defense budget and more than the Europeans spent to defend them-selves...

...The European allies, after all, stare directly at Russian guns...

...Then, attempting to remedy the stagfla-tion he had inherited, President Nixon restructured the international monetary system...

...President Reagan took office deter-mined to control government spend-ing-and equally determined to restore America's world primacy...

...The author integrates history, statis-tics, and economic theory into a near-seamless analysis of the contradictions between the hegemonic impulses of the last twenty years and America's original intentions for postwar Europe...

...At home, he cut taxes in order to spur industrial growth toward full employ-ment...

...For another, he ignored the fact that the United States spends much less on social programs than all of its allies except Japan, where private corporations provide elaborate health plans and pen-sions...

...Professor Calleo argues that the Rea-gan administration should bring foreign responsibilities into harmony with Amer-ican resources...

...This trend began with the Kennedy administration...

...But the pressures of ever-widening deficits have a logic of their own...

...Professor Calleo writes, "[T]he notion that the proper monetary policies could control inflation . . . suggests a political program considerably beyond the intellectual and moral scope of monetary analysis...

...With its goals of European recovery, super-power detente, and Third World devel-opment," Mr...

...Nor should monetary policy ever have been used as such...

...Inflation will end only when its budgetary sources stop feeding it...

...Calleo's commentary is impress-ive...

...By the end of the seventies, the United States no longer had the power to induce Europeans to accept the inflation they felt Americans had foisted upon them...

...With Alexander Haig at the State Department, there was obviously no chance...

...But the Truman administration chose another tack...

...It is reasonable, then, to expect that Soviet proximity would persuade the Europeans to take up the slack: if not to replace American troops, then to pay for their presence, just as West Germany reim-burses the United Kingdom for a part of its Continental brigade...

...Believing that President Eisenhower had translated American hopes for a European renais-sance into an excuse for inaction, Presi-dent Kennedy embraced a program of deficit spending and global leadership...

...According to David P. Calleo, General de Gaulle had a point...

...Abroad, he promoted more mili-tary expenditures, new foreign assistance programs, intervention in Cuba and Vietnam, and international tariff reduc-tions that would open Europe to Ameri-can grain exports...

...The question remains, however, whether the Reagan administration is willing to make any military reduction in Europe...

...First came the Vietnam War and the Great Society, expensive programs that pro-duced American deficits, international inflation, and European indignation...

...Calleo suggests that this neo-Keynesian paradise proved ephemeral...

...For one thing, the president re-fused to consider that the United States, long after the recovery of western Europe and Japan, still spends a much larger percentage of its GNP on defense than do its allies...

...Had it chosen to spend several years and large chunks of its resources, it could have expelled the Soviet army from central Europe and forced former allies and enemies to re-main economically and politically sub-servient to American interests...

...Howard Rosen & Alexander Kaplen LESSON IN AMERICAN HUBRIS CHARLES DE GAULLE wrote in his memoirs, "The United States, de-lighting in her resources, feeling that she had within herself insufficient scope for her energies, wishing to help those who were in misery or bondage the world over, yielded in turn to that taste for in-tervention in which the instinct for domi-nation cloaked itself...

...As Ken-nedy's boldness metamorphosed into Johnson's will for power, so began al-most two decades of budgetary extrava-gance and economic instability...

...as democracies, they presumably possess even less taste for Soviet hegemony than they do for the American variety...

...Neo-conservatives like Irving Kristol, with memories of European appeasement as remote as Rapallo and Munich and as fresh as the latest grain embargo, foresee America's allies refusing to rearm and going the way of Finland...

...In The Imperious Economy, Pro-fessor Calleo contends that the United States has adopted Europe both as a cherished protectorate and a prop for its own inflated economy, imposing a monetary and military hegemony that in-cites growing European resentment and pushes the American economy further into deficit, inflation, and recession...

...Even after his departure, it seems unlikely that the president, as spooked as he is by the Russians, will consider the notion...

...It promoted European recovery to thwart Soviet expansion...

...the Truman Doctrine to arm governments threatened by anti-democratic insur-gents...

...But these goals proved contradictory, as they had for every administration since Ken-nedy's...

...With John Connally as his hatchetman, he extricated the United States from the global currency agreements it had estabished in 1944 at Bretton Woods...

...But Nixonian neo-mercantilism brought only temporary success...

...he used to be the Commander of NATO...

...International monetary manipula-tion was no longer available to the United States as a temporary fix for a bloated economy...

...it is defense...

...Suspending the dollar's convertibility and imposing a ten percent import surcharge were first steps in a campaign to end fixed rates of exchange, to devalue the dollar, and to gain a trad-ing advantage that Kennedy's tariff re-ductions had been unable to achieve...

...Liberals who want the United States to renounce the first use of nuclear weapons in Europe fear that a reduction of America's conventional troops would increase its reliance on a nuclear strategy...

...Calleo implies that American troop reductions would prod the nations of western Europe to become the autonomous allies envisoned by Pres-ident Truman...

...Professor Calleo contends, however, that the last two decades of American foreign and economic policy have at-tempted to undermine the European au-tonomy that had been Truman's primary postwar goal...

...A partial American with-drawal from NATO, he believes, would help to extricate the United States from its budgetary morass...

...Professor Calleo's proposal, of course, has critics...

...It is not social welfare that needs cutting...

...Viewing the last twenty years as "an age of economic gimcrackery, in which [American] gov-ernments have trifled with . . . infla-tion...

...He achieves an extraordinary synthesis, while developing his historical account so subtly that it rarely reads as the moralistic lesson in American hubris which it ultimately is...

...In response, Mr...