As Congress works to pass a revised bailout plan for sinking financial institutions, and the repercussion of the crisis is felt severely throughout the world,Â a recurring question seems to be on international bloggers’ minds:Â Is the economic leadership of the US in the world starting to fade away? The question stemmed from an article written by John Gray on the Guardian's blog “Comment is free” and this money quote was re-posted at European Avenue and Denis Chazelle at Superfrenchie:
Mired in their rancorous culture wars and squabbling among themselves, they seem oblivious to the fact that American global leadership is fast ebbing away. A new world is coming into being almost unnoticed, where America is only one of several great powers, facing an uncertain future it can no longer shape.
In the comment section, many thought that the claim that US leadership is on the decline is premature, if not false. Strifez argues:
It is entirely delusionatory. The US isn't any poorer than it was 8 years ago. In fact, its richer. Both GDP and GDP-per capita has grown at rates that Europe envies. The gap between American science/technology and the rest of the world, according to a study this year, has increased (to the US's advantage), not narrowed. And the US military, despite years of fighting on the other side of the planet, is as potent as it has ever been, and at the start of a 5 year, $100 billion “reset program.”
But far too often, the economy, this immense beast which far too many people trivialize to be as simple as a football score (Dow down 320 = Manchester United blown out 5-0). Some parts are thriving, others are rotten to the core[..] In short, a lot of this declinist stuff is a gigantic circular argument. People already come into the debate wanting the US to be decline [..]No nation is perfect. America has many, many flaws, and much it must do to correct them (and questionable leadership ability to do it). But the people within America, the actual Americans, are in the midst of making historic leaps ahead and advances in every sector.
There is no denying the major influence of US economy on the global marketplace. For instance, in Cambodia, KJE explains how the crisis affects the country:
The garment sector will not suffer too much as the garments produced are for the most part low-end items that will have a market even in bad times. Wal-Mart is the best example. They posted an increase in sales in the first quarter of 2008 despite the bad economic news and with many people losing their homes and jobs.Tourism will stagnate in 2009, perhaps starting in the last quarter of 2008 already. Many Europeans are already staying home or opting for less expensive destinations in the Mediterranean (due to shorter flights). On the other hand, Cambodia is still an attractive destination as both accommodations and meal prices are despite a 23% rate of inflation still very reasonable compared to Thailand or Indonesia, for instance.The real estate bubble will deflate but not burst.
In South Africa, Mariam Isa notes that the economic crisis has already affected the manufacturing industry:
Any recovery will be muted by a slump in the global economy, with manufacturing activity in some of SA's main trade partners stalling dramatically in the same month [..] A lot of things are happening now which will have a negative impact on SA – purchasing managers are hesitant about buying into this (manufacturing) recovery.
Questions arise about whether the US government owning financing institutions is a sign that the US economy is drifting away from a market-driven society. Michael van der Galien at the PoliGazette (Netherlands) explains why he thinks that is not correct:
I do not believe that the market will not be able to overcome the current crisis. Of course it will be able to deal with it; itâ€™s just that millions of lives will be destroyed if the government doesnâ€™t help the market deal with this problem. The market can deal with it, but against a terrible price[..] Iâ€™m glad, or will be glad if neo-liberal market fundamentalism in development strategy dies at quick death as a result of this Wall Street pity party. But, I still believe, for better or worse, the US will remain a more market-oriented society than the EU
Finally, Andrew Sullivan (United Kingdom) quotes Robert Gates on a call for a reduced role of America in the world:
First, limits about what the United States – still the strongest and greatest nation on earth – can do. The power of our military's global reach has been an indispensable contributor to world peace – and must remain so. But not every outrage, every act of aggression, every crisis can or should elicit an American military response, and we should acknowledge such.