They are all interesting spectacles but I am not invested in the end result because I do not believe it matters.
The United States is, I have concluded from my infrequent visits, an empire. With regions as diverse as the big island of Hawaii, the inner suburbs of Boston and the languid south all ruled from a capital that has become remote from its diverse and complex regions the US looks more like an imperial project than a nation-state.
All empires end.
We have, since the fall of Berlin and surrender of Japan aboard the USS Missouri lived in a world dominated by that super-power and since the disintegration of the Warsaw Pact in 1991 it has been a largely unipolar world order.
As we look across the Pacific at the two leading candidates for the presidency it is difficult to retain faith in America retaining this hegemony. American power is based on its economy and the financial power this gives Washington; but there is evidence that this is coming to an end.
Central to this concern is the federal deficit. Currently the country is not facing a severe war, economic depression or even a pandemic; yet federal spending will exceed revenue by 1.8 trillion; six percent of national GDP.
A quarter of federal spending is borrowed. Sovereign debt as a percentage of GDP now exceeds what it was after the second world war.
Historically the US has repaired its federal balance sheet thanks to a strong trade surplus with the rest of the world and the privilege it has enjoyed since 1944 because the US dollar is the global reserve currency.
The trade surplus was lost in the 1980s and the US now relies on flooding the world with printed greenbacks in return for goods and services. The dollars’ reserve status ensures it remains a coveted asset and trillions have been hoarded around the world. When the allure of the USD is lost these will flow back into circulation and the economic party will come to a messy end.
This isn’t a specifically American problem. Since the GFC we have seen similar behaviour across the west and the best explanation I can find is a sentiment incorrectly attributed to an 18 th century Scottish professor, Alexander Tytler; that democracies are temporary in nature and collapse once voters understand that they can vote themselves gifts from the treasury.
The trend to fiscal recklessness is endemic across the democratic west and is a sign of systematic weakness. We are squabbling over the pettiest of cultural-war issues while the basis of our economic and military security, fiscal stability, erodes faster than a snowman on ninety-mile-beach.
The failure to defend Ukraine is a dramatic manifestation of this US-led decline.
Thanks in part to the economic support of China and the collective weakness of the western response Russian forces continue to eke out marginal gains. They seem destined to prevail. Meanwhile Iran has been emboldened to stir up trouble in the Middle East and the US is impotent against a possible Chinese adventure to capture Taiwan.
Across the Pacific China has its own challenges and sometimes I wonder if its communist façade hides a brittleness similar to that which brought the Soviet Union to a dramatic collapse, but for the moment it is Uncle Sam that is stumbling towards the abyss.
From our perspective this means having to choose between our cultural brethren or our economic masters. Our trade tilts to Beijing. We export twenty billion to China; compared with fourteen billion to the United States.
Making this relationship more complex is the decentralised nature of the US, which means that trade across the Pacific isn’t centrally controlled. Beijing, being an autocratic regime, has the power to turn New Zealand ships back; a decision that would be economically catastrophic and makes us vulnerable to the mood of the Forbidden City.
We can see the growing influence of Beijing in the number of our former political and current business leaders kowtowing to a regime that, if it wasn’t for their economic strength, would be shunned.
We are living in a global environment with a resurgent and possibly belligerent China while our former allies decline in economic and consequently military clout.
It is evident that neither of the two leading presidential candidates have the temperament, skill-set or inclination to reverse this trajectory. The outcome may matter to those who live in the land of the brave but for the rest of us; the long-term retreat of America from the position of global super-power will not be reversed......The full article is published HERE
All empires end.
We have, since the fall of Berlin and surrender of Japan aboard the USS Missouri lived in a world dominated by that super-power and since the disintegration of the Warsaw Pact in 1991 it has been a largely unipolar world order.
As we look across the Pacific at the two leading candidates for the presidency it is difficult to retain faith in America retaining this hegemony. American power is based on its economy and the financial power this gives Washington; but there is evidence that this is coming to an end.
Central to this concern is the federal deficit. Currently the country is not facing a severe war, economic depression or even a pandemic; yet federal spending will exceed revenue by 1.8 trillion; six percent of national GDP.
A quarter of federal spending is borrowed. Sovereign debt as a percentage of GDP now exceeds what it was after the second world war.
Historically the US has repaired its federal balance sheet thanks to a strong trade surplus with the rest of the world and the privilege it has enjoyed since 1944 because the US dollar is the global reserve currency.
The trade surplus was lost in the 1980s and the US now relies on flooding the world with printed greenbacks in return for goods and services. The dollars’ reserve status ensures it remains a coveted asset and trillions have been hoarded around the world. When the allure of the USD is lost these will flow back into circulation and the economic party will come to a messy end.
This isn’t a specifically American problem. Since the GFC we have seen similar behaviour across the west and the best explanation I can find is a sentiment incorrectly attributed to an 18 th century Scottish professor, Alexander Tytler; that democracies are temporary in nature and collapse once voters understand that they can vote themselves gifts from the treasury.
The trend to fiscal recklessness is endemic across the democratic west and is a sign of systematic weakness. We are squabbling over the pettiest of cultural-war issues while the basis of our economic and military security, fiscal stability, erodes faster than a snowman on ninety-mile-beach.
The failure to defend Ukraine is a dramatic manifestation of this US-led decline.
Thanks in part to the economic support of China and the collective weakness of the western response Russian forces continue to eke out marginal gains. They seem destined to prevail. Meanwhile Iran has been emboldened to stir up trouble in the Middle East and the US is impotent against a possible Chinese adventure to capture Taiwan.
Across the Pacific China has its own challenges and sometimes I wonder if its communist façade hides a brittleness similar to that which brought the Soviet Union to a dramatic collapse, but for the moment it is Uncle Sam that is stumbling towards the abyss.
From our perspective this means having to choose between our cultural brethren or our economic masters. Our trade tilts to Beijing. We export twenty billion to China; compared with fourteen billion to the United States.
Making this relationship more complex is the decentralised nature of the US, which means that trade across the Pacific isn’t centrally controlled. Beijing, being an autocratic regime, has the power to turn New Zealand ships back; a decision that would be economically catastrophic and makes us vulnerable to the mood of the Forbidden City.
We can see the growing influence of Beijing in the number of our former political and current business leaders kowtowing to a regime that, if it wasn’t for their economic strength, would be shunned.
We are living in a global environment with a resurgent and possibly belligerent China while our former allies decline in economic and consequently military clout.
It is evident that neither of the two leading presidential candidates have the temperament, skill-set or inclination to reverse this trajectory. The outcome may matter to those who live in the land of the brave but for the rest of us; the long-term retreat of America from the position of global super-power will not be reversed......The full article is published HERE
Damien Grant is an Auckland business owner, a member of the Taxpayers’ Union and a regular opinion contributor for Stuff, writing from a libertarian perspective
2 comments:
I see Damien contributes to Stuff. If the above and its succinct like appear in the msm I will consider renewing my subscription.
it is little wonder the price of gold is soaring. Ownership for ordinary folk is complex hence in NZ we try to safeguard with property instead.
Grant is being more than a little short-sighted if he is truly "not invested in the result" of the US elections. As he chooses to highlight later in the article, we are a trading nation and our continued well-being depends on keeping that trade flowing . We are dangerously exposed to the China market and China has demonstrated it will weaponise trade for the slightest geo-political gain, real or perceived. Trump is even more dangerous with his proposed tariff structures since they will damage our interests immediately. Never forget one of his first actions upon winning the presidency in 2016 was to renege on US membership of the Trans-Pacific Partnership, a key trade initiative of New Zealand. Next time he could be instrumental in totally collapsing all our existing trade with the US. If that's not a reason for all of us to be invested in the result, I don't know what is.
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