As the spasms and ripples from our spectacular economic implosion have gone out, lots of folks have speculated about where the U.S. will end up when all is said and done.
Just at the moment, there seem to be two general schools of thought.
The first, from Fareed Zakaria, envisions a humbler America, informed by a necessary reversion to fiscal conservatism.
But it’s a different world out there. If Iraq cast a shadow on U.S. political and military credibility, this financial crisis has eroded America’s economic and financial power. In the short run, there has been a flight to safety—toward dollars and T-bills—but in the long run, countries are likely to seek greater independence from an unstable superpower. The United States will now have to work to attract capital to its shores, and manage its fiscal house better. We will have to persuade countries to join in our foreign endeavors. We will have to make strategic choices. We cannot deploy missile interceptors along Russia’s borders, draw Georgia and Ukraine into NATO, and still expect Russian cooperation on Iran’s nuclear program. We cannot noisily denounce Chinese and Arab foreign investments in America one day and then hope that they will keep buying $4 billion worth of T-bills another day. We cannot keep preaching to the world about democracy and capitalism while our own house is so wildly out of order.
And then there’s the alternative view, presented by Bret Stephens at the Wall Street Journal, where the U.S. maintains its status as Global Collosus:
Constantinople fell to the Ottomans after two centuries of retreat and decline. It took two world wars, a global depression and the onset of the Cold War to lay the British Empire low.
So it’s a safe bet that the era of American dominance will not be brought to a close by credit default swaps, mark-to-market accounting or (even) Barney Frank.
Not that there’s a shortage of invitations to believe otherwise. Almost in unison, Germany’s finance minister, Russia’s prime minister and Iran’s president predict the end of U.S. “hegemony,” financial and/or otherwise. The New York Times weighs in with meditations on “A Power That May Not Stay So Super.” Der Spiegel gives us “The End of Hubris.” Guardian columnist John Gray sees “A Shattering Moment in America’s Fall From Power.”
Much of this is said, or written, with ill-disguised glee. But when the tide laps at Gulliver’s waistline, it usually means the Lilliputians are already 10 feet under.
Frankly, the very arrogance of seeing the world as populated with Lilliputians over whom America towers view makes my skin crawl.
I’ll settle for a more modest Gulliver, thanks.