IRAQ IMPASSE AND ECONOMIC SLUMP MARK DEMISE OF AMERICAN DOMINANCE

By Mark Sommer and - - Reprint | | Print |

This column is available for visitors to the IPS website only for reading. Reproduction in print or electronic media is prohibited. Media interested in republishing may contact romacol@ips.org.

ARCATA, CALIFORNIA, Jan 29 2008 (IPS) - Less than a decade after neo-conservatives gained ascendancy in the White House and announced a \’new American century\’, that unrivalled supremacy has been challenged by a titanic haemorrhaging of American economic dominance, military readiness, and political influence, writes Mark Sommer, host of the award-winning, internationally-syndicated radio programme, \’A World of Possibilities.\’. In this article, Sommer writes that the fact that the \’family jewels\’ of American capitalism are being sold off to \’sovereign wealth funds\’ controlled by national governments is an ominous development for a nation that until now has seldom had to worry about its solvency or sovereignty. US decline is neither inevitable or irreversible. The emergence of an African American and a woman as viable candidates for president has energised not only American voters but observers from around the world who despite its egregious recent record still yearn for re-inspired American leadership.

In the wake of the new year’s grim greetings – a global stock market swoon and growing consensus that the US economy is headed for recession – the only question still being debated is how far and long will it fall.

American policy makers and economic analysts studiously avoid telling a truth they dread but may not themselves fully comprehend: less than a decade after neo-conservatives gained ascendancy in the White House and announced a ‘new American century’, that unrivalled supremacy has been challenged by a Titanic haemorrhaging of American economic dominance, military readiness, and political influence.

These trends have been long in the making. Reversing them will require a stiff dose of realism for which there is currently little appetite and a regimen of self-restraint and rededication still far from the minds of both American politicians and their publics.

For the past generation the US has been dis-investing in its educational and health care systems, its physical and industrial infrastructures, and its decaying democratic institutions while Europe, China, and India have been reinventing themselves as vibrant economies.

No more stunning illustration of this reversal of positions can be found than in the current ‘fire sale’ of stakes in prime US corporate and financial assets to the likes of Russia -just a decade past terminal bankruptcy and now flush in oil revenues – tiny city-states like Singapore and Abu Dhabi, and, most of all, China. The fact that the ‘family jewels’ of American capitalism are being sold off to ‘sovereign wealth funds’ controlled by national governments is an ominous development for a nation that until now has seldom had to worry about its solvency or sovereignty.

Just eight years after the announcement of a sole-superpower world, we are entering a post-American era in which at least two other potent power centres have emerged to challenge the hegemony of the debt-ridden American empire: an expansive and increasingly self-confident European Union, and a Chinese economic engine that has deftly combined the state-controlled politics of communism with the rapacious dynamism of unbridled capitalism. Not far behind is India, whose population is due to surpass China’s within a few decades and boasts a burgeoning middle class that, like China’s, demands Western-style consumer comforts, social freedoms, and, increasingly, political rights.

To be sure, the EU, China, and India all face challenges of their own which, if not effectively addressed, could short-circuit their rise to global stature. Heady with success, the EU has taken on new members with a rapidity that strains its internal cohesion. China faces a collision with the environmental and social consequences of heedless industrialisation. and India’s hundreds of millions of urban and rural poor remain locked out of the country’s new-found affluence.

None of these emerging superpowers will continue deferring to the US as they have for the past half century. Seven years of the Bush administration’s arrogance and obstructionism combined with rising levels of prosperity and education have both obliged and enabled Europe, China, and India to start forging links with one another. They are now setting their own global standards and making their own trade arrangements with one another and a second tier of resource-rich nations like Russia, Turkey, Iran, and Brazil.

The fact that stock exchanges from Shanghai to Bombay and Frankfurt appeared to ‘catch pneumonia’ after Wall Street ‘sneezed’ confirmed that this ‘decoupling’ is still far from complete. But analysts in Europe and Asia say their economies are unlikely to follow the US into recession because their ‘fundamentals’ are so much healthier and none is burdened with Iraq or a global war on terror. With a common currency and a market a third larger than the US, the EU now sets global manufacturing standards and social and environmental benchmarks which China and other global suppliers must adhere to.

Stunningly, none of the leading candidates for president acknowledges the power shift now under way. This denial is in itself a signal that the United States is unlikely to respond decisively to its loss of unchallenged dominance by undertaking the deep changes required to reverse current trends.

But US decline is neither inevitable or irreversible. The emergence of an African American and a woman as viable candidates for president has energised not only American voters but also observers from around the world who despite its egregious recent record still yearn for re-inspired American leadership.

Despite its loss of power and influence, the US will remain a powerful player in global politics for the foreseeable future. Unlike Britain when the relinquishment of empire forced a retreat to the second tier of nations, its size, enterprising culture, and innovative tradition ensure the US a pivotal role in global politics. Hard times ahead may even revitalise a dysfunctional political culture. More likely, American citizens, institutions, and corporations will join with millions of others from around the globe to advance a common agenda that their government will, at best, be late in joining. But in our collective race to adapt to changing realities, American political leaders may well find themselves running to catch up.(END/COPYRIGHT IPS)