A respected American economist argued on the question of American power which is “in decline” as in the following:
“In the United States, the scent of decline is in the air. Imperial overreach, political polarization, and a costly financial crisis are weighing on the economy. Some pundits now worry that America is about to succumb to the ‘British disease.’ Doomed to slow growth, the US of today, like the exhausted Britain that emerged from World War II, will be forced to curtail its international commitments. This will create space for rising powers like China, but it will also expose the world to a period of heightened geopolitical uncertainty.” (Professor of Economics and Political Science, University of California at Berkeley, Barry Eichengreen: Chinadaily.com.cn, 2010-11-10)
After the G-20 Seoul Summit in November 11-12, 2010, a worldwide phenomenon in terms of “American power which is in decline” (Tom Englehardt: “Sixty-five percent of respondents [in America] chose as their answer: ‘in a state of decline.’”) seems to have become even further evidently clearer more than any other time ever since the birth of unipolar world in late 20th Century. Englehardt introduces the latest NBC News/Wall Street Journal poll which shows the “61% of Americans interviewed considered ‘things in the nation’ to be ‘on the wrong track.’” Now even a number of world’s major mainstream media outlets both from the East and the West, as if pre-agreed uniformly, began to talk about publicly the issue of American power in decline which was once the de facto global superpower. The above-quoted excerpt from Prof. Eichengreen is one of them.
“G-20 fallout: Trade barriers, tensions could rise” is the title of an article written by Paul Wiseman for Associated Press. He also argues “the summit was a diplomatic setback for the United States,” by which he might have tacitly meant the US power is “in decline.” Another example is in the language of Edmund Phelps who is the winner of the 2006 Nobel Prize in economics. He said “The United States did not play its cards very well with China,” during his live video conference in New York. This remark was his response to a question if “the US was somewhat isolated during the G20 summit in Seoul.” He added “the real problem is the conflicts between Europe and the US as they fight to export more. And Obama came up with unpopular solutions.” (Chinadaily.com.cn, 2010-11-14)
A question like why on earth the once “only global superpower” whose “primacy in the world” (Zbigniew Brzezinski, The Grand Chessboard, 1997, p. 40) over a half century now has become an object of worldwide humiliation may arise. What the US Federal Reserve Board did right before the G-20 Summit was apparently taken by many as an act of like “troublemaker,” “selfishness,” or “arbitrariness.” Surprisingly, this time, those heavy critiques of America’s another unilateral action did come from all ends, however. Not only all those four BRIC countries but also America’s traditional major allies such as Germany, France and even Japan uniformly acted in their critiques. They all denounced America’s unilateral action. Coincided with its economic crisis, America’s once near-absolute global dominance, at least last couple of decades, whose encompassing power over the whole globe had never been precedent in human history, seems to have been irrecoverably dwindled down. Its decline seems now a non-stoppable worldwide phenomenon. The core issue is how come that arrogant global empire might have become a humiliated power? Prof. Eichengreen arguably questions: “Is America doomed to the same fate [of formerly once mighty British Empire]?”
As well-known, according to the above-mentioned AP article, the U.S. wanted to rally other G-20 delegates to press China bent over the issue of yuan appreciation. However, America’s wish was undercut by its “another” irrational arbitrary action that, as in the language of AP, “the Federal Reserve was rigging the currency market itself”: “Last week, the Fed said it would essentially print $600 billion to jolt the U.S. economy back to life. The Fed says its plan to buy Treasury bonds was designed to lower long-term interest rates, spur economic growth and create jobs. But foreigners saw a more sinister intent: to flood world markets with dollars, driving down the value of the U.S. currency and giving U.S. exporters a price edge.” (Wiseman, AP)
What US wanted did not take place, however. Instead, its less-prudent selfish action seemed hit itself hard. It became like a boomerang. After all, it even seemed severely damage its already-dwindling image further sunken. America’s another self-inflicting unilateral act instead turned out to be in the service of China’s position. Until recently, even Brazil criticized Chinese trade policies. However, at the G-20 meeting, Brazil, together with other major powers like Germany and France, instead blamed the US “for causing currency problems.” They were all concerned “the Fed’s bond purchases would push Treasury yields so low that investors seeking higher returns will overwhelm their fragile markets.” Their unified fears seem not groundless: “Investors would sink money into emerging market assets — currencies, stocks and other investments. That would push up their currencies, hurt their exporters, trigger inflation, create bubbles in stocks and other assets and leave them vulnerable to a crash when investors withdraw their money.”
The AP also describes the present situation after the Fed decision: “The Americans faced charges of doing some currency manipulation of their own by pumping $600 billion into their economy.” In addition to this “setback” or “damage,” Obama administration also failed to finalize its public vow to make its free trade deal with its one of the most staunchest pro-US regimes in Seoul final and then move ahead to sign a long-awaited trade agreement before the G-20 Summit. However, it didn’t succeed either. One can also argue this failure could be considered another sign of “American power in decline.” In other words, its already severely-damaged global leadership has become even further humiliated at the G-20. After all, it was the American government who “was isolated” at an increasingly-important global summit, not the China who the US had attempted to do so. The declining sign of American power seemed culminated when the rest of the G-20 participants “endorsed the idea that emerging markets can protect themselves from the threat of such ‘hot money’ (i.e., The once mighty global reserve currency, the US dollar) by imposing controls on the flow of capital — a measure that used to be considered ‘a big no-no’ and a violation of free-trade principles.” What they did at G-20 was essentially to make the America’s selfish and arbitrary decision a week ago null.
Prof. Eichengreen predictably argues in the following: “Herein lies the most convincing explanation for British decline. The country failed to develop a coherent policy response to the financial crisis of the 1930’s. Its political parties, rather than working together to address pressing economic problems, remained at each other’s throats. The country turned inward. Its politics grew fractious, its policies erratic, and its finances increasingly unstable. In short, Britain’s was a political, not an economic, failure. And that history, unfortunately, is all too pertinent to America’s fate.”
(Kiyul Chung, PhD, is Editor-in-chief at The 4th Media, English Website of the April Media. He’s also Adjunct Professor at School of Journalism and Communication, Tsinghua University.)