THE first week of August, according to some commentators, will go down in history as signifying a tipping point in terms of the loss of American hegemony.
This conclusion is based primarily on the downgrading of the United States’ credit rating by Standard & Poor’s (S&P), in the wake of a Capitol Hill compromise over raising the nation’s debt ceiling that was advertised, inter alia, as a means of pre-empting this very outcome.
The subsequent precipitous decline in international stock markets could be construed as substantiating this thesis, although it also underlines America’s continuing key status in the global economy. The significance of the fact that China — and, too a lesser extent, India — deemed it necessary to berate the US for its fiscal imprudence has not been lost on observers, though.
As America’s largest creditor, China’s concern is not surprising; and it is widely assumed that China’s economy, powering along at a growth rate of about 10 per cent, will in due course overtake that of the US. The tone of the dressing-down, however, was as unprecedented as the ratings downgrade.
Within the US, there has been a degree of outrage over S&P’s chutzpah — it was, after all, among those agencies that, far from raising any flags of warning, continued to award an AAA rating to culpable financial institutions in the run-up to the subprime mortgages crisis. Which is not entirely remarkable, given that the agencies derive their income from these very institutions, hence they can hardly be considered independent. Their appalling judgment entailed no penalties.
It is intriguing, meanwhile, that half of the Democrats in the House of Representatives voted against the last-minute deal hammered out between the White House and leading Republicans, which broadly entails huge spending cuts in the decades ahead, without any commensurate increase in taxation.
Last year, President Barack Obama agreed to extend his predecessor George W. Bush’s tax cuts for the very rich — which have cumulatively cost the US Treasury more than the wars in Iraq and Afghanistan. He has suggested that he has not given up on the idea of imposing new taxes on the wealthy, but his record of caving in to the Tea Party types does not bode well.
During his presidential campaign, Obama harboured some illusions about a post-partisan America. Given that ideological distinctions between the Democrats and the Republicans have grown fuzzy over the decades, the idea may not have seemed completely fantastical to some. He ought to have known, though, that a rightwards shift in the so-called liberal centre invariably encourages conservatives to drift towards extremes.
What made such a process even more likely was the fact that a substantial proportion of American citizens were discomfited by the very idea of an African-American head of state. Small wonder, then, that the nonsense about Obama’s birth certificate gained so much traction.
What’s more worrying, though, is the fact that the president has managed to alienate to such an extent the constituency that elevated him to the White House three years ago. It is beginning to seem increasingly unlikely that Obama will be re-elected next year. He may just squeeze in if the Republican candidate is too polarising, but it certainly won’t be easy — not least given the tendency of American voters to simply abstain if they are not too pushed about the results.
The 61 per cent turnout in 2008 was extraordinarily high by US standards; last year’s Republican landslide in the midterm elections was based on a turnout of about 40 per cent — which, albeit not unusual, is pathetic for a nation supposedly dedicated to ‘spreading democracy’ in various parts of the world.
One of the most pertinent critiques of the debt deal has been that it will exacerbate America’s biggest socio-economic problem, namely the appalling level of unemployment. The leading Republican negotiators have been accused of behaving like terrorists. That’s hardly a complimentary assessment, particularly in the run-up to the 10th anniversary of the Sept 11 terrorist attacks. It barely needs to be pointed out that those who wish America ill will be heartened by recent intimations of its capacity for self-harm.
Obama, meanwhile, might do well to soak up some ancient wisdom. There is, for instance, a fable attributed to Aesop about a man and his son taking their donkey (which coincidentally happens to be the Democratic Party’s symbol) to market.
They are berated first of all for not riding the beast, so the man puts his son on the animal’s back. Soon thereafter, the son is accused by other passersby of being lazy, so the father replaces his son as the rider. Inevitably, this action too is criticised, so he seats his son in front of him. Whereupon the two of them are accused of overburdening the animal.
After a bit of pondering, they tie the donkey’s feet to a pole and decide to carry the animal instead, which leads to much jeering. As they are crossing a bridge to get to the market, the donkey disentangles one of his legs and kicks out. In the fracas that ensues, the animal falls over the bridge and is drowned because its forelegs are still tied.
The moral of the story? Those who seek to please everybody will please nobody.
To which one might add: those who please nobody cannot seriously aspire to a two-term presidency. Yet the prospect of Obama losing in 2012 is an unpleasant one — not on account of his (lack of) achievements, but because of the likelihood that his successor could be someone as crazy as Michele Bachman. The idea of a representative of the loony right presiding over the possible end of empire hardly bears contemplation.
Eventually someone will have to start wondering whether free-market capitalism, which entails the supremacy of the profit motive, is such a good idea after all. But it would be silly to hold one’s breath.
mahir.dawn@gmail.com
Source: Dawn News
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