U.S. Power Is Declining Thanks To Trump & GOP Extremists

Paul Krugman comments on the decline of Pax Americana in The New York Times: 

When Hamas attacked Israel, Republicans knew whom to blame: President Biden. Donald Trump asserted that the attack wouldn’t have happened if he were still in the White House; Mike Pence, while condemning Trump for praising Hezbollah and Hamas, asserted that Biden was somehow endangering U.S. interests by “projecting weakness.”

Like much of what the American right says these days, these smears were both vile and infantile. No, the U.S. president isn’t like the Green Lantern, able to shape world events through sheer force of will. And Biden has in fact taken remarkably tough positions on foreign affairs, much more so than his predecessor.

More generally, it’s striking how both the far left, which has no significant influence on the Democratic Party, and the far right, which largely runs the G.O.P., are American solipsists. They blame U.S. leaders for everything bad that happens in the world, denying foreigners any agency.

That said, even serious students of international affairs are noting that the world seems to be becoming more dangerous, with many local cold wars turning hot, and suggesting that we may be witnessing the end of the Pax Americana, the long era in which U.S. economic and military dominance limited the potential for wars of conquest.

But why is the Pax Americana in decline?

You might be tempted to engage in economic determinism, saying that the United States has lost influence because it doesn’t dominate the world economy the way it once did. But while there was a big decline in America’s share of world G.D.P. between 1960 and 1980, since then that share hasn’t had a clear downward trend, although it has fluctuated with the foreign exchange value of the dollar.

Indeed, our strong recovery from the Covid recession, combined with the stumbles of some geopolitical rivals, makes U.S. economic dominance look more durable than it has for a long time. Notably, many observers are now suggesting that China’s G.D.P., measured in dollars, may never overtake America’s. (China’s economy is already larger in terms of domestic purchasing power, but this is less relevant for global influence.)

Oh, and despite all the hype about de-dollarization, the U.S. dollar seems, if anything, to be more central to the world economy than ever.

Furthermore, changes in the world economy have arguably given the United States new ways to exercise economic power. The international relations experts Henry Farrell and Abraham Newman recently published “Underground Empire: How America Weaponized the World Economy,” a revelatory book that describes how modern globalization — which creates far more complex forms of interdependence than traditional international trade — has put America “at the heart of an international web of surveillance and control.”

And the Biden administration hasn’t been at all shy about using U.S. power. Aid to Ukraine, while fairly minor relative to the U.S. budget, has been a major factor in frustrating Russian aggression; America has also aggressively deployed both its financial and its technological power to apply sanctions against the Putin regime. In the latest crisis, Israelis, including Benjamin Netanyahu, have praised Biden for his prompt support, which probably explains why Trump has lashed out at a former political ally.

Furthermore, Biden has taken a remarkably hard line on Chinese technology. Where Trump huffed and puffed ineffectually against Chinese trade surpluses (which were never the problem), Biden has imposed sanctions that the Center for Strategic and International Studies calls a “policy of actively strangling large segments of the Chinese technology industry — strangling with an intent to kill.”

If this is “projecting weakness,” what would projecting strength look like?

Yet it seems safe to say that the world no longer trusts U.S. promises, and perhaps no longer fears U.S. threats, the way it used to. The problem, however, isn’t Biden; it’s the party that reflexively attacks him for anything that goes wrong.

Right now America is a superpower without a fully functioning government. Specifically, the House of Representatives has no speaker, so it can’t pass legislation, including bills funding the government and providing aid to U.S. allies. The House is paralyzed because Republican extremists, who have refused to acknowledge Biden’s legitimacy and promoted chaos rather than participating in governance, have turned these tactics on their own party. At this point it’s hard to see how anyone can become speaker without Democratic votes — but even less extreme Republicans refuse to reach across the aisle.

And even if Republicans do somehow manage to elect a speaker, it seems all too likely that whoever gets the job will have to promise the hard right that he will betray Ukraine.

Given this political reality, how much can any nation trust U.S. assurances of support? How can we expect foreign enemies of democracy to fear America when they know that there are powerful forces here that share their disdain?

Yes, the Pax Americana is in decline. But the problem isn’t lack of toughness at the top. It’s the enemy within.

How Should We Deal With The Decline Of China?

The following is most of an op-ed by Bret Stephens in The New York Times:

The main challenge we will face from the People’s Republic in the coming decade stems not from its rise but from its decline — something that has been obvious for years and has become undeniable in the past year with the country’s real estate market crash.

Western policymakers need to reorient their thinking around this fact. How? With five don’ts and two dos.

First, don’t think of China’s misfortunes as our good fortune.

A China that can buy less from the world — whether in the form of handbags from Italy, copper from Zambia or grain from the United States — will inevitably constrain global growth. For the U.S. chip maker Qualcomm, 64 percent of its sales last year came from China; for the German automaker Mercedes-Benz, 37 percent of its retail car sales were made there. In 2021, Boeing forecast that China will account for about one in five of its wide-body plane deliveries over the next two decades. A truism that bears repeating is that there is only one economy: the global economy.

Second, don’t assume the crisis will be short-lived.

Optimists think the crisis won’t affect Western countries too badly because their exports to China account for a small share of their output. But the potential scale of the crisis is staggering. Real estate and its related sectors account for nearly 30 percent of China’s gross domestic product, according to a 2020 paper by the economists Ken Rogoff and Yuanchen Yang. It is heavily financed by the country’s notoriously opaque $2.9 trillion trust industry, which also appears to be tottering. And even if China averts a full-scale crisis, long-term growth will be sharply constrained by a working-age population that will fall by nearly a quarter by 2050.

Third, don’t assume competent economic management.

Last month Donald Trump described the rule of China’s president, Xi Jinping, as “smart, brilliant, everything perfect.” The truth is closer to the opposite. As a young man, according to a peer from his youth, Xi was “considered of only average intelligence,” earned a three-year degree in “applied Marxism” and rode out the Cultural Revolution and its aftermath by becoming “redder than red.” His tenure as supreme leader has been marked by a shift to greater state control of the economy, the intensified harassment of foreign businesses and a campaign of terror against independent-minded business leaders. One result has been ever-increasing capital flight, despite heavy-handed capital controls. China’s richest people have also left the country in increasing numbers during Xi’s tenure — a good indication of where they think their opportunities do and do not lie.

Fourth, don’t take domestic tranquillity as a given.

Xi’s government’s recent decision to suppress data on youth unemployment — just north of 21 percent in June, double what it was four years ago — is part of a pattern of crude obfuscation that mainly diminishes investor confidence. But the struggles of the young are almost always a potent source of upheaval, as they were in 1989 on the eve of the Tiananmen Square protests. Never mind Thucydides’ trap; the real China story may lie in a version of what’s sometimes called Tocqueville’s paradox: the idea that revolutions happen when rising expectations are frustrated by abruptly worsening social and economic conditions.

Fifth, don’t suppose that a declining power is a less dangerous one.

In many ways, it’s more dangerous. Rising powers can afford to bide their time, but declining ones will be tempted to take their chances. President Biden was off the cuff but on the mark this month when he said of China’s leaders that “when bad folks have problems, they do bad things.” In other words, as China’s economic fortunes sink, the risks to Taiwan grow.

Sixth, do stick to four red lines.

American policymakers need to be unbending and uncowed when it comes to our core interests in our relationship: freedom of navigation, particularly in the South China Sea; the security of Taiwan and other Indo-Pacific allies; the protection of U.S. intellectual property and national security; and the safety of U.S. citizens (both in China and in the United States) and residents of Chinese ancestry. Helping Ukraine defeat Russia is also a part of an overall China strategy, in that it sends a signal of Western political resolve and military capability that will make Beijing think twice about a military adventure across the Taiwan Strait.

Seventh, do pursue a policy of détente.

We should not seek a new cold war with China. We cannot afford a hot one. The best response to China’s economic woes is American economic magnanimity. That could start with the removal of the Trump administration tariffs that have done as much to hurt American companies and consumers as they have the Chinese.

Whether that will change the fundamental pattern of Beijing’s bad behavior is far from certain. But as China slides toward crisis, it behooves us to try.