The very first column I wrote for this paper looked at the dim and autumnal mood coming out of Washington. A number of influential thinkers had concluded that the era of U.S. dominance was coming to an end. The military was overstretched, debt was overwhelming, the East’s new economies were taking over and no one was listening to the Yanks.
One of those thinkers, Yale’s Immanuel Wallerstein, described his country as “a lone superpower that lacks true power, a world leader nobody follows and few respect, and a nation drifting dangerously amidst a global chaos it cannot control.”
That was 2002, and those predictions would be forgotten for the greater part of a decade. But now those phrases are back in force, coming from a different set of mouths. This time, a lot more people are listening.
Once again, it’s autumn in America. Who could doubt it this week, when the New York Stock Exchange collapsed, Washington stumbled out of a nail-biting debt emergency with its fiscal reputation in tatters, China’s central bank chided the Fed for its irresponsibility, growth seemed a distant memory, and a budget-slashing military prepared to pull out of Afghanistan and soft-shoe the conflict in Libya?
We have given up on the United States, by default, because the United States appears to have given up on itself. Or so we keep repeating. It’s become a cliché.
Yes, the U.S. is sick. Very, very sick, with little chance of recovery in the foreseeable future. But, despite all that, it would be premature and unprofessional to declare the illness terminal.
A few things should be kept in mind. First, pay attention to what happened when markets plummeted Thursday: Precious metals, the euro and the loonie also tumbled as investors fled to the safety of U.S. Treasury securities.
The greenback remains the world’s haven. Despite two years of deliberate currency devaluation (and more to come), the U.S. dollar remains the preferred currency of reserve, exchange, account and savings – not because it’s stable but because there’s nothing else on the horizon. Countries have snapped up all the Brazilian real securities they can find, China’s yuan isn’t trusted and the euro has lost whatever reputation it had.
Second, note that Washington’s debt emergency was not a real event created by economic circumstances but a political event created by a partisan showdown. The U.S. debt burden would be eliminated almost immediately if Congress would implement tax measures of the sort that Canada and most Western countries have. The fact that Congress won’t do so is deeply damaging to the U.S. economy and its citizens’ livelihood, but it’s not inevitably related to America’s standing in the world.
And third, ignore those tales of military decline. Yes, Afghanistan and Iraq were either failures or break-evens, but so were the first three big wars the U.S. fought after the Second World War. Yes, military spending is being slashed, but only to mid-2000s levels, still giving the U.S. more force than all other major armies combined. America didn’t take a back seat in Libya because it’s weak or unable but because President Barack Obama was being politically shrewd in a part of the world where he dare not use a heavy hand these days.
We were equally certain the United States had lost its role in the world on other occasions. In 1957, 1969, 1973, 1981 and 1988, the best minds in foreign affairs were making exactly the same declaration, with equally good reasons.
The same factors applied: America was paralyzed with debt, its export earnings had vanished, its people were tragically undereducated, underprotected and unhealthy compared with other wealthy countries, it was being creamed by fast-growing economies abroad (Russia, then Japan, then Europe), its faltering currency was losing ground to stronger rivals, it was losing wars, its culture was shallow, its military spending and foreign obligations were about to push it into the bankruptcy and decline of “imperial overstretch,” as historian Paul Kennedy described it in his 1987 book The Rise and Fall of the Great Powers, which predicted a collapse of U.S. influence.
He could just as well have been right that time. And they could be right this time: It does look pretty bad. At some point, the U.S. will become “just another country,” like Britain, its sterling-and-empire days behind it. To a certain sort of flag-waver, and to a certain sort of anti-American, that will be as good as death. But given this patient’s habit of leaping up from the mortuary slab, I wouldn’t put pennies on its eyes quite yet.