The Decline of American Influence
Is America’s influence on the world stage evaporating? That is what the author of this article is asserting:
The most palpable sign of U.S. weakness is its policy toward Russia. Obama’s State Department promised “painful” sanctions for Russia’s policy on Ukraine, but the U.S. hasn’t even managed to inflict a bruise. To really “hurt” Russia economically, the U.S. needs its European allies to obey, and they are turning their backs to Obama’s anti-Russia plans.
The New York Times reports:
“Not only were they [the G7 nations] unwilling to snub the Russian leader entirely, as Mr. Obama sought, they were also reluctant to go along with other efforts to isolate the Kremlin. Most notably, the French government repeated that it would go ahead with the $1.6 billion sale of powerful warships to Moscow along with plans to train 400 Russian sailors in France this month. And other European leaders were cautious about setting further red lines threatening additional sanctions against Russia.”
The Obama administration was especially vexed by France. After France didn’t back down from the arms deal with Russia, the U.S. government fined France’s biggest bank $10 billion, ostensibly for money laundering.
The Bush-like arrogance it takes for the U.S. to fine an overseas French bank has outraged the French government and public alike, and likely won’t make Obama more friends in Europe. But U.S. global domination of the global financial system — because of the U.S. dollar’s status as the world’s reserve currency — is one of the last forms of U.S. foreign power, and it too is shrinking.
To emphasize that last point, a new bank for the BRICS has been established to counter the influence of the IMF and World Bank:
The BRICS group of emerging powers have launched a $100bn development bank to be based in the Chinese city of Shanghai, according to a joint declaration.
The group will set up the new bank, with the capital equally shared among the BRICS members – Brazil, Russia, China, India and South Africa.
The New Development Bank’s first president will be from India while the board’s chairman will be Brazilian, according to the declaration released at a summit in Fortaleza, Brazil.
It is no longer (if it ever truly was) a unipolar, US dominated world. But when will US leadership acknowledge this reality?
Acknowledging reality has never been a strength of this country, especially in this new century where a statement (probably from Karl Rove) like this can be made:
We’re an empire now, and when we act we create our own reality.
In this created reality seemingly forever insulated from objective reality, the Federal Reserve keeps puttering along, pretending low interest rates will get the economy going. From Zerohedge:
The Status Quo has only survived this crushing expansion of debt by dropping interest rates to historic lows. This is a chart of the yield on the 10-year Treasury bond, which reflects the extraordinary decline in interest rates over the past two decades.
The Federal Reserve has pegged rates at essentially 0% for years. That means the strategy of lowering interest rates to enable more debt has run out of oxygen: rates can’t drop any lower, and so they can either stay at current levels or rise.
There are graphs at the link bolstering this point.
So if “quantitative easing” of insolvent banks and 0% interest rates have not sparked the economic activity we were promised, does the Fed have other options? It doesn’t look like it.
Maybe if that debt-creation stemmed from domestic infrastructure investment we’d see better results. But that’s not happening. Instead America is going into debt in order to dominate the global resource wars, and in that effort, America is losing.
In this emerging, multipolar world US foreign policy can no longer rely on the threat/use of its military to intimidate and bully other nations into submission.
Are our leaders capable of shelving the hubris and acknowledging this new reality? The longer they don’t, the deeper they dig.