The Reckoning

The Reckoning Begins

America’s insularity knows no bounds. This is a paradoxical statement, of course, but it’s an apt way to describe America’s current debate about “our future,” and not a bad way to view Washington’s strained efforts to grapple with an economy wounded by two decades of economic Puritanism. As grand as the rhetoric may be, politicians in the United States remain incapable of looking beyond the next election—this goes for the haughty Democrat in the White House and goes double for the Republican opposition. The fact is, airy-fairy optimism still sells on the campaign trail, particularly when the day-to-day reality of the average American is so difficult. Christian, agnostic, Jew, Muslim, or otherwise, we’re a country of people constantly seeking redemption, and we’re suckers for a smooth-talking messiah. 

Not this time. At the risk of breaking the hearts that throb for Rick Perry, Mitt Romney or Barack Obama, they cannot deliver us from the future. Thanks to a catastrophic series of decisions by presidents of both parties that radically deregulated our financial system and arrogantly dismissed the “lessons of Vietnam” as dusty, irrelevant history, the United States has shortened the period during which it will remain the dominant power in the 21st century. I know, I know, all the presidential candidates say we’re still the best! And so we are, in almost every economic and military measure. But measurements of power are like the altimeter of an aircraft: It’s not the altitude that matters, it’s the trajectory, and by now most Americans finally understand that Captain America is trending downward.

Destiny is a big, pretentious concept. Yet today, most Americans understand what their politicians refuse to concede—at least publicly: We’ve lost control of our destiny. Globalization, the fairy dust proffered by everyone from Ronald Reagan to Bill Clinton to Thomas Friedman, turns out to have some significant downside risks. Many Americans have heard of globalization at this point, and many have very particular opinions of it—normally associated with negatives like offshoring, immigration or, perhaps, the complex risks of modern markets. But few really understand its implications. Thus the continued use by vacuous news networks of the term “nationally televised address,” or the absurd assumption that our economic fate rests in our own hands. The world today—a world largely forged by American economic and foreign policy prejudices during the 20th century—now has profound influence on our future. Every word a president says in those Oval Office broadcasts these days resonates not just in the cozy “focus groups” in Iowa but also in the offices of the China Investment Corporation and sovereign wealth funds from Qatar to Japan to Russia who hold giant slices of our national debt. Like it or not, they have real leverage now, and evidence and history suggests they will eventually use it.

Contrary to what you have been told, the political game under way today ends not with control of the White House, a plan for a balanced federal budget, or a jobless rate suddenly hovering at a magical 8 rather than sour 9 percent. The larger picture—the new “Great Game,” if you will—is about the speed of America’s decline from the heights of hegemony to the more earthly altitude that 21st century gravity will impose.

This is not a matter of choice: Relative decline has already occurred—it depends on how you measure it. For instance, in terms of “percent of global output,” the U.S. economy has been in relative decline ever since 1946, when it represented more than 50 percent of global GDP. Today, the U.S. is at about 20 percent, and projections suggest China will match that slide in about 2015.

But the more serious measurements—potential growth rates, GDP per capita, GDP itself, only turned south relative to other global competitors recently.  It is only now, in the second decade of the post-American century, that these trends have penetrated the thick skull of the collective national consciousness. (Even now, some seem claim a magical power—manifest destiny? exceptionalism? prayer meetings?—will intervene and undo the laws of physics. More on this form of dementia as this blog matures.)

So, the situation is grim, but not hopeless. As I hope to convince you through this new blog and in my book of the same title (coming from Palgrave Macmillan in the spring), the relative decline America has entered requires something a good deal more complex than fiscal austerity. The U.S. will remain the world’s most important nation well into this century—that’s not a question. How we handle the implications of our relative decline—not only at home, but around the world where we have maintained the balance of power in region after region since 1945—will matter enormously. Unraveling our global commitments in a way that does not prompt a geopolitical “Lehman Bros.” moment will be the true test of whether the United States was, as we like to believe, better than past hegemons.

Yet this requires the kind of planning America has shown no penchant for since at least the Marshall Plan of the late 1940s. More seriously, it requires a willingness to face up to the limits of American power that recent history simply belies.

Do I think it can be done? Yes, I do. But it will not flow from the top—and certainly not from the current crop of incremental thinkers who run both parties. Thankfully, the U.S. middle class—on the right and left—both seem to have reached a “boiling frog moment” with regard to promises being made on their behalf. The Tea Party and Occupy Wall Street may approach this from radically different perspectives—and indeed, they may hate the idea that they have anything in common. But if there is one thing that unites them, it is the sense that their futures have been mortgaged away by an unaccountable, narrow-minded political class.

So who am I to offer prescriptions? I’ve been around—I won’t bore you here—check out my bio on Wikipedia. In the coming weeks and months, through Eurozone paroxysms and fiscal blindness in Washington, primary debates, the Iraqi withdrawal, and other global events, I’ll keep my eyes on the horizon. The American political cycle perpetually conspires to lower your sights, to narrow the context of all you see down to a Hollywood sounds stage that best favors a particular partisan point. Come here for the antidote, and when you think I’m failing, don’t hold back. This is no time to pull punches: The Reckoning has begun.