Column: The post-American world

Written by Meghnad Desai | Updated: Oct 14 2013, 09:04am hrs
I expect the crisis in the US will be still unresolved as you read this over your breakfast. The complacency with which many people have viewed this current logjam is not surprising. Again and again the usual stand-off between the President and the Congress has resulted in short stops in the US economy. But, This time is different.

For one thing, the deadline over the Budget will run into the deadline over the debt ceiling. This is a double whammy. Second, the Republican Party is divided and there is a diehard minoritythe Tea Party ideologues for whom there is no price large enough to pay for getting their way. Like the Old Left, they are Flat Earthers and have a lot of grassroot support. Speaker Boehner is bound by the Hastert rule which says that a Speaker cannot bring to vote any proposition to which the majority party does not agree. Thus, a coalition of the Democrats and a small number of Republicans which could pass the Budget without the de-funding clause on Obamacare cannot be put together as no vote can be called.

If the Republicans are die-hard, the President also has no cause to compromise. He does not face re-election. If he concedes now, the rest of his Term will be a disaster with continuing blackmail. His hope is to make the Republicans take the blame until they relent. This would help his Party in the 2014 elections and who knows the Democrats may capture both Houses. That is the prize he is waiting for because then his final two years can be fruitful.

The anger and the vehemence of the Tea Party people have an explanation. Average wages have risen hardly at all in the USA in the last forty years since the Oil Shock of 1973. Profits have gone up. An ordinary worker used to be able to finance a good life style for his family working alone in a manufacturing job. With manufacturing shrunk and the new jobs requiring college degrees, the semi-skilled manual worker has lost out. Now it needs two members of the family to work and borrow on top of that to sustain the American Dream.

Lot of Americans have lost out. But in terms of expectations, the White working class has lost out most and they resent it. They do not blame the Market or the Big Capitalists. Their ideological roots are in free market capitalism. They blame the government which they KNOW is the enemy. While the Black and Hispanic working class will expect the government to be their friend in need, the White working class does not.

Hence the anger and the frustration. The Tea Party Congressmen demand balanced budgets and a cut in debt. They do not remember, or, if they did, they do not blame the Republican PresidentsReagan, Bush Senior and Bush Juniorwho were profligate spenders, gave away tax cuts to the rich and pursued adventures abroad. Clinton balanced the Budget in the last years of his presidency, but that apart, the US Budget has not been in balance since Eisenhower was President. Thus, the economic anger of the Tea Party is directed against Obama more out of a certain amount of racist hatred for a mixed-race president (recall the controversy on his birth certificate) than merely against Washington Big Government.

But there is more going on than just the logjam. Americas climbdown in the Syrian chemical weapons crisis may have averted a new phase in the War but it has shown the reluctance of the Old AlliesUS and UK to shoulder the burden of policing the International Order they set up. Many would welcome this multi-polar world. But such a world without a Hegemon will be chaotic. This was the case between the two World Wars with Britain receding from its prime position and America unwilling to take on the burden. This time around China is the most likely the new Hegemon but is reluctant to take on the role. Analogies are never exact but what we face now is decades of an unsettled international order.

Empires decline in different ways. Some collapse because of defeat in a War. Thus, the Austro-Hungarian, the Ottoman and the Czarist Empires collapsed at the end of the First World War.(The Russian Empire was revived by Lenin.) After the Second World War, the Maritime EmpiresDutch, British and Frenchfell apart over years in some cases. America was never a formal empire but still a Great, not to say the Greatest Power, in history. Is it about to decline

The decline of America has been discussed for the last forty years as well. This time however there is a fatigue or perhaps, worse, an inability to intervene. Plus, we have now a breakdown of consensus of such serious proportion that the fiscal soundness of the American State is at stake. Are we entering post-American era

The author is a prominent economist and a Labour peer