Monday, July 04, 2011

Happy Independence Day, Americans. Now, Settle Down.

There are signs that 9/11 fever may have run its course with our southern cousins. 

A '4th of July' poll conducted by Time Magazine and the Aspen Institute reportedly concludes that Americans are beginning to come to terms with their decline from their perch as the world's sole superpower.

The poll – which finds that more than two-thirds of Americans consider the last 10 years to have been a decade of decline for America – is in sync with other surveys of American opinion in recent months. According to the poll, three-fourths of Americans say economic weakness poses a bigger danger to the US than do national security threats.

In May, a Pew Research Center poll found that majorities in every partisan group of the population – including, for the first time in the decade of 9/11, conservative Republicans – agreed with the statement that the US “should pay less attention to problems overseas and concentrate on problems here at home.”

Other recent Pew polls have found Americans’ “mind-our-own-business” thinking at its highest level since the end of the Cold War.

Significantly, one Pew poll recently found that not just average Americans, but “opinion makers” as well, increasingly favor a less assertive global role for the US – a finding that led Pew Research Center Director Andrew Kohut to dub the dawning era as one of significant transition from the nation’s post-9/11 mindset.

In some ways, Americans’ inward turn seems to reflect their leaders’ recent rhetoric. Last month President Obama declared, in announcing his plans for a troop drawdown in Afghanistan.  “America, it is time to focus on national-building here at home.”

This must be absolutely depressing to Gaffney, Perle, Bolton, Cheney, Rumsfeld, Wolfowitz, Feith, Hadley and the rest of the neo-con clown car.  It would be foolish, if not dangerous, to assume they're going to allow anyone to dismantle their painstakingly crafted Warfare State without a fight.  Yet America's pendulum has been held to the far right much too long, kept in place mainly by a military/industrial/corporate warfighting complex fueled on trillions of dollars of borrowed money.   It has degraded America's economy, left it over-extended, inelastic, poised to snap back hard.

The neo-cons have had an amazing run and they've left their nation in near ruin because of it.   What happens when the people wake up, grab that morning coffee and ask how a nation up to its eyes in debt at every level can spend more than all of its enemies, all of its friends plus every other country combined on its military and not expect to be ruined for it?

America has knocked itself off its perch and I suspect the world will be better for that.  Yet it faces a very rocky road for which it is nowhere near ready.

Economists point to a chilling effect on U.S. wages because so much manufacturing and even white-collar work can now be shipped abroad. The increasing integration of the U.S. economy into a poorer global economy is thought to be a key factor in growing U.S. income inequality, where the income gains of the middle class are far smaller than those at the top of income scale.

"I think it's a very significant factor," said Larry Mishel, the president of the Economic Policy Institute, a liberal research organization that closely tracks wage and labor issues.

EPI research suggests that trade with emerging markets, and globalization of trade more broadly, had the effect of reducing by $2,500 a two-earner family's annual take-home pay in 2006 from what it otherwise would've been.

In addition, big emerging economies such as China, Brazil, and India will increasingly influence what we earn, the jobs we retain, the price we pay for a loaf of bread, a cup of coffee and especially a gallon of gasoline. Because their growing appetite for goods competes with others, including us, and drives up prices.

"It means there is going to be more upward pressure on commodity prices than we have seen in the past, and oil is prime among them," said Alan Levenson, the chief economist for the Baltimore-based investment firm T. Rowe Price. "You can do the math about what happens to global demand if China wants to live like Europe."

What is the future of globalization, something we in the West created, when it no longer serves the interests of our peoples?  I'm convinced the way forward will not be a global economy.  If nothing else, the security aspects of resource shortages and energy security may undermine globalization that has been built upon low energy costs and secure transportation corridors.
Economist Levenson's remark about what happens to global demand if China wants to live like Europe gives a lot of food for thought.   The easy answer is "nothing" because the Earth's renewables are already overtaxed.   There is no way that the Chinese and the Indians could achieve anything like Western standards of living.   The best they can hope for is a greater share of the resource pie which would mean a much smaller share for existing prosperous countries.  
Some very affluent countries - like Japan and Britain - have very limited domestic resources.   They face having to compete with the emerging economies for ever more expensive foreign resources.   Other nations, like Canada, have considerable resource wealth and will have to wrestle with many questions concerning the extent to which we want to share those resources and at what cost domestically.  It's a national conversation we should actually be having now, but...

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