Memo to the President, 2020

Posted January 2, 2007

Categories: Articles

As a member of the transition team, I’ve been asked to give a backgrounder on the “loss of global influence” issue that played such a major role in the last election. I’ve submitted my study entitled End of Empire and I would encourage you to read my full analysis. I’ve been told that you might not have the time to read all three volumes. As a historian, I find it extraordinarily difficult to boil this question down to 750 words. But I will try.

Historians are divided into roughly three camps on the causes behind the end of the unipolar system headed by our country. The largest camp is the Iraq Syndrome group. They argue that the U.S. decision to invade Iraq in 2003 was the critical, history-changing moment. As you well know, the invasion turned into an unsuccessful 10-year occupation that sapped the U.S. economy and significantly eroded U.S. reputation in the world. More damaging, however, was the syndrome that followed the war. The unpopularity of the war made it increasingly difficult for the United States to launch military operations and virtually impossible to solicit international support. Although the Democrats tried to maintain high military budgets through 2010, they ultimately had to make significant cuts in order to salvage the economy.

The second camp is generally called the China Rising group. These historians, influenced by the world-systems work of Wallerstein, locate the end of U.S. influence in shifting geopolitical power and particularly the growing influence of China. As of February 2019, the Chinese economy is now larger than ours, though we still maintain a lead in per-capita GNP. More importantly, China’s turn toward multilateralism in the early part of this century caught us by surprise. The transformation of the Shanghai Cooperation Organization (SCO) into the premier international security mechanism, with its own peacekeeping forces and development bank, undercut both NATO and traditional U.S. bilateral alliances. When the EU became a member of the SCO in 2014, the transatlantic alliance was effectively over.

The Iraq Syndrome and the China Rising arguments are familiar and persuasive. But I do not believe that they fully explain our fall. The third camp, to which I belong, is called the Subprime group. Although we are currently considered revisionist historians, I believe that my End of Empire books definitively establish that the financial crisis that the United States experienced in 2007 was the key element in destroying our position in the world.

As you might remember, the United States experienced a significant housing bubble beginning in 2001. Americans became obsessed with buying houses, and selling houses. The banks devised a way of lending money to people who ordinarily would not have enough credit to buy a house. This was called the sub-prime loan. Without going into the details — please see Chapters 2-8 in Volume One of End of Empire — I will simply remind you of the rising number of foreclosures in the summer of 2007, the bankruptcy of lenders, the failure of hedge funds, the collapse of retail, the devaluation of the dollar, and the coordinated global bank interventions that turned out to be only a stopgap measure.

At the time, U.S. economists predicted that the housing market would recover by 2009. That didn’t happen. The subprime crisis revealed not only the underlying fragility of the domestic U.S. economy but the global economy as well. It is a common fallacy to draw parallels between household economics and the functioning of the national economy. However, in this case, I have argued that the parallel did apply. Average Americans, with their large amounts of debt, had to give up their prized possessions, that cornerstone of the American dream, the house. So, too, did the United States, with its nearly $9 trillion national debt, have to give up its global position, its “house” so to speak.

Historians in the two other camps overlook this simple and rather elegant explanation. Yes, the Iraq War was a tremendous drain on U.S. resources and thus a classic case of imperial overstretch. Yes, China played the multilateral card at just the right time and thereby built an international reputation. But it was a handful of greedy mortgage lenders that served as the catalyst. The market correction that followed the subprime crisis in fact turned out to be a much larger geopolitical correction that restored a certain balance to international affairs. Finally, with 2020 hindsight — to use this year’s most popular catch phrase — we can see that Iraq and China pale in comparison to the cold, hard bottom line. As you repeatedly said on the campaign trail, quoting one of last century’s most enduring lines, “It’s the economy, stupid.”

Poetic Interventions

To do a proper job of futurology, it is perhaps best to look to our poets, since they embody the most visionary sector of society.

This week at FPIF, Iranian poet and FPIF contributor Farideh Hassanzadeh–Mostafavi interviews some of the world’s leading poets to get their insights into world politics. In her set of interviews On Political Poetry, she asks them to comment on Kafka’s statement that war boils down to a lack of imagination. “War is childish — infantile – behavior,” Sam Hamill replies. “War is a country soiling its diapers and pitching a fit, a temper tantrum.” On U.S. foreign policy, Joy Harjo says, “I am ashamed of America’s small-minded and small-hearted policy toward other countries, other peoples. But it doesn’t surprise me. This policy was and remains behind genocidal policies against indigenous peoples here. It forms the basis of the educational system, the philosophical systems, everything.”

And the task of a poet? Maryam Ala Amjadi has a surprising answer: “A true poet hurts and wounds and sometimes even humiliates, because poetry must be an event not an occasion. You can never really get close enough to someone if you do not touch them and to touch deeply and profoundly is to hurt. It is the wounds that breed familiarity; it is the scar that remains as a memorandum between you and them, one that you could never forget even if you wanted to.”

Our second Fiesta article this week looks at the rise of extrajudicial killings in the Philippines and how artists there have responded. Since 2001, Filipino human rights organizations have tallied over 800 killings. Death squads connected to the Philippine Army are widely suspected of responsibility.

“The extrajudicial killings have again set Filipino artists to work,” writes FPIF contributor Carmela Cruz in Artists against Assassination. “They held concerts like Arrest the Killings at the Freedom Bar, a cramped alternative space in Metro Manila, and in the open fields of the University of the Philippines. Visual artists, including those who opposed the Marcos regime, joined younger painters and performance artists in the Tutok Karapatan (Focus on Rights) series of exhibitions of new paintings and art works held in private galleries and university halls. At the same time, independent films about the country’s colonial past and leftist movements like Indio Nacional (The Prolonged Suffering of Filipinos) and Juan Kaliwa (Left Turn) were screened at various film festivals in Europe, Asia, and the United States. The many recent Filipino art works have assessed the present-day Philippine situation through the colonial, strife-torn context of the past as well as perceptions of a seesawing, passive-aggressive, servile-heroic national identity.”

Send Love and Money

Immigrants now send more money home than countries provide in overseas development assistance. As FPIF contributor Francis Calpotura points out in Remittances: For Love and Money, “In 2005, migrant workers sent a total of $232 billion to their country of origin, more than three times the amount of official development assistance. In many parts of the developing world, remittances account for 30% or more of the gross domestic product. Inflows from Mexicans living abroad, for example, represent the country’s second largest source of foreign income behind oil exports.”

This enormous amount of money, Calpotura argues, can be put into the service of sustainable development. In communities across the United States, Million Dollar Clubs are organizations with members who collectively send at least a million dollars every year back to their home countries. “At the next level up,” he continues, “La Liga (The League) networks the Million Dollar Clubs and their allies globally as economic leverage to promote sustainable development. It allows member organizations in both host and home countries to have the ability to jointly apply pressure to receiving and sending governments to respond to community needs and change policies that exacerbate migration.”

In Southwest Asia, the Pashtuns have come together across borders to exert influence in a somewhat different way. In Talk to the Taliban, FPIF contributor Tarique Niazi describes a recent meeting in Kabul of Pashtuns from both Afghanistan and Pakistan. This Jirga, which the United States helped to broker, came up with some unexpected results, namely a call for negotiations with the Taliban. “The call does not spell out the talks’ schedule, scope, substance, or venue,” Niazi writes. “Meanwhile, the Taliban has rejected the Jirga as a ‘U.S.-sponsored farce.’ It is opposed to the U.S.-backed Northern Alliance government in Kabul and wants troops led by the United States and NATO (North Atlantic Treaty Organization) to leave Afghanistan. This issue of foreign troop withdrawal was controversial at the Jirga. Although carefully screened by their respective governments, a smattering of Jirga members did manage to articulate their support for the Taliban’s call for foreign troops to leave, which they wished to replace with those of Islamic countries.”

And Korea

The summit of the leaders of North and South Korea has been postponed until October because of serious flooding in North Korea.
Still, negotiations continue between the participants in the Six Party Talks. The question remains, however: what does Washington really want out of the current negotiations? The Bush administration has changed its negotiating strategy and there seems to be a marked decline in regime-change enthusiasm in Washington.

Nevertheless, as I argue in Three Hard Truths, the United States hasn’t changed its fundamental approach to Northeast Asia. This approach is based on three hard truths. The United States fundamentally doesn’t care about North Korea. The United States is deeply ambivalent about Korean reunification. And the United States is allergic to a regional security system.
“These are not hard truths for Americans,” I write. “After all, the average U.S. citizen doesn’t pay attention to North Korea unless a legislator mischaracterizes Pyongyang’s missile capabilities as advanced enough to hit Kansas. Rather, these are hard truths for those in East Asia who hope for a true end to the Cold War in the region.”

If, like the president, you don’t have time for the full analysis, check out the 60-Second Expert version of this essay.

FPIF, August 21, 2007

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