New world order, part 1: The U.S. faces a new reality
As the new year begins, the United States finds itself deeper than ever in debt, with its currency losing ground against the euro. It is bogged down in failed, costly wars that have no ends in sight. Millions of Americans are reeling from the still-unfolding real-estate crisis. Meanwhile, in America's corridors of power, there is growing unease about the booming economies and runaway growth of countries like China and India, the demise of the United States' own auto-manufacturing sector and other industries, and Americans' dependence on Chinese-made everything.
A bank-repossessed property for sale in California last August: Effects of the real-estate crisis could be felt for years to come
While Washington has been sleeping, China has been investing deeply in Africa, Latin America and other parts of Asia. Once-stalwart allies like Australia are acknowledging that, from now on, it's policy-makers in Beijing whom they'll be aiming to please. Washington worrywarts fret about China's (and Russia's) unstoppable rise to superpower status, but has the huge, industrialized, post-communist, totalitarian state already become a superpower?
Those are some of the concerns on the minds of news commentators, economic analysts and policy-makers in Washington these days. Against this backdrop, what might 2008 have in store?
» Robert Shiller, an economics professor at Yale University who is recognized as one of the leading experts in his field, has "predicted that there [is] a very real possibility that the U.S. [will] be plunged into a [1990s-like,] Japan-style slump, with house prices declining for years....Shiller, co-founder of the respected S&P Case/Shiller house-price index, said: 'American real-estate values have already lost around $1 trillion....That could easily increase threefold over the next few years. This is a much bigger issue than subprime [mortgages]. We are talking trillions of dollars' worth of losses.'" (Times, U.K.)
Symbol of China's boom: Model of Beijing International Airport's new, $3.6-billion terminal, designed by British architect Sir Norman Foster, which might open in time for the start of the 2008 Olympic Games in the Chinese capital in August; the city is already planning a second international airport to open in 2015
» A news-analysis article in the Toronto Star notes that, at last month's international summit on global warming in Bali, a delegate from Papua New Guinea addressed the "U.S. delegation that tried to thwart reforms agreed to by the other 185 nations present." He told the American representatives: "We seek your leadership. But if for some reason you are not willing to lead, leave it to the rest of us. Please get out of our way."
The Canadian newspaper notes of 2007: "It became more apparent than ever this year that the U.S. is no longer the world's lone superpower. Instead, there are five superpowers that will define the world for at least the next half-century: the U.S., China, India, Russia and a united Europe." This news "came home to Americans on Main St. from tainted Chinese products to the fact that practically every toy sold in America comes from Red China. [sic] Boston seniors on group tours of the great capitals of Europe were humbled to discover that their greenbacks had shriveled in value to 60 per cent of the local currency....[C]ascading defaults on U.S. subprime mortgages had so weakened the balance sheets of leading financial institutions...that the likes of Citigroup and Merrill Lynch had sought bailouts from state-owned investment funds in Singapore and the United Arab Emirates." Canadians felt the shifting balance of power, too, "in a 15-percent gain against the greenback."
Photo of an American assembly-line worker: The Institute for Supply Management has just reported that U.S. factory activity contracted in December to its weakest level since April 2003
About the countries that are posing challenges to the U.S. today: All are nuclear powers and "[a]ll but one, India, have veto power at the United Nations. Collectively, the four non-U.S. superpowers have 10 times the population of the U.S. The European economy has eclipsed that of the U.S., and those of China and India will do so by mid-century." The common aims of these emerging superpowers: "to unleash, under the banner of patriotism, the potential economic prowess of a nation or region, and in doing so to claim a role on the world stage equal to that of the U.S." As former British Prime Minister stated in 2005: "A single-power world is inherently unstable....That's the rationale for Europe to unite....We are building a new superpower. The European Union is about the projection of collective power, wealth and influence. When we work together, the European Union can stand on par as a superpower and a partner with the U.S."
One of the biggest trends many observers of the U.S. routinely cite, with alarm, is the fact that "America now is the world's largest borrower, and China the biggest creditor nation. As everyone but the White House acknowledges, it's difficult to have much impact in pressuring China on its undervalued currency, its military build-up and its human-rights record when that country is also your biggest banker."
The Toronto Star analysis adds: "Even in a world without budding rivals, the American superpower would still be jeopardized by its 'unsustainable' disregard for tackling rundown schools and inner-city neighborhoods, a yawning gap between rich and poor, and a route to citizenship for the country's estimated 12 million illegal immigrants. Even superpowers are fragile once the rot of complacency sets in."
Original article posted here.
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