America’s decline – myth or reality?

By Bernd Debusmann
April 20, 2012

Take note of a new phrase in the seemingly endless debate over whether the days of the United States as the world’s pre-eminent power are numbered: Those who doubt the country’s economic decline are holding an “intellectual ostrich position.”

The expression was coined by Edward Luce, author of a deeply-researched new book entitled Time to Start Thinking: America in the Age of Descent. It notes that the United States accounted for 31 percent of the global economy in 2000 and 23.5 percent in 2010. By 2020, he estimates that it will shrink to around 16 percent.

Luce’s diagnosis of descent, published in April, was the latest addition to a steadily growing library of books, academic papers and opinion pieces for or against the idea that the United States can maintain its status as the world’s only superpower. If we adopt Luce’s phrase, it’s a discussion between declinists and ostriches. The latter include President Barack Obama and his presumptive Republican rival in next November’s presidential elections.

“It means that we’re going to have a 2012 election where…both candidates will start on a false premise: that relative economic decline is simply to be ignored or dismissed,” Luce said in an interview with Foreign Policy magazine. “And I’d describe that as a kind of intellectual ostrich position.”

The false premise, in this view, was set out by Robert Kagan, a scholar at the Brookings Institution, a Washington-based think tank, in a lengthy analysis entitled Not Fade Away: Against the Myth of American Decline. One of the points Kagan made to support his argument: the U.S. share of world Gross Domestic Product (GDP) has held steady over the past four decades. Plain wrong, says Luce.

The Kagan article, now expanded into a book (The World America Made), is reported to have so impressed Obama that it influenced his State of the Union Speech in January, when he said “Anyone who tells you that America is in decline or that our influence has waned doesn’t know what they are talking about.”

They don’t? Here’s the view of Clyde Prestowitz, a labor economist and veteran declinist, weighing into the debate in April: “You’d have to be blind not to see the deterioration of our infrastructure. We used to have trade surpluses. Now we have chronic deficits. We used to tell ourselves that didn’t matter because we had surpluses in high tech items. But now we have deficits there, too. We used to be the world’s biggest creditor. Now we are its biggest debtor…How can anybody claim we are not suffering decline?”

Washington’s loss of influence has been evident in many regions of the world, most recently at a summit that brought together leaders of North and Latin America in the Colombian city of Cartagena. There, in Uncle Sam’s traditional backyard, Obama’s assertion that U.S. influence had not waned highlighted a particularly wide gap between rhetoric and reality.

BACKYARD NO MORE?

The backyard showed itself so united in opposition to decades-old U.S. policies – the trade embargo on Cuba, the war on drugs – that the summit ended without the usual final communiqué. “There was no consensus,” said the summit’s host, Colombian president Juan Manuel Santos, an important U.S. ally in the region.

Apart from disagreements over two of Washington’s oldest (50 years of Cuba embargo, 40 years of drug war) and most obviously failed policies, the meeting showed that the United States is no longer seen as the single most dominant force in the region. As an analysis by the Washington-based Inter-American Dialogue put it on the eve of the Cartagena meeting:

“U.S.-Latin American relations have grown more distant. The quality and intensity of ties have diminished. Most countries of the region view the United States as less and less relevant for their needs – and with declining capacity to propose and carry out strategies to deal with the issue that most concern them.”

Why less and less relevant? For one, U.S. economic dominance in Latin America is no longer what it used to be. A decade ago, 55 percent of the region’s imports came from the United States. That has shrunk to less than a third. China’s share of trade with Brazil, Latin America’s economic and political powerhouse, has overtaken that of the United States. The same goes for Chile and Peru.

To what extent U.S. influence in the backyard will continue to slide depends largely on how clear-eyed U.S. leaders see their country’s global position. The ostrich view would hasten the decline.

20 comments

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Given the clear data the author provided, it is difficult to see how Mr. Obama or Mr. Romney can conclude anything else.

Posted by AltonDrew | Report as abusive

Ah yes, the classic ostrich pokes its head in the sand with its back to the oncoming tsunami… doesn’t know what hit it.

Posted by DisgustedReader | Report as abusive

The status of an empire is dependent on many factors.

Economic power: How much do we trade with the rest of the world? We’re mostly buying and doing very little selling to the rest of the world. We’ve had chronic trade deficits for literally decades which makes us a debtor nation, not a creditor nation. These trends have not exhibited any sustained improvement in a very long time. When our trade deficit does shrink it is almost always a result of less buying and not increased exports. This does not look like ascendency to me.

Social power: This is the soft power, the moral power that causes other countries to look at the US and expect us to do the right thing in any given circumstance. Wars of aggression, torture and other despicable behavior, hypocrisy (viz our varied response to the Arab spring and our efforts to co-opt it), and our generally arrogant behavior in our dealings with the rest of the world have taken the shine off the city on the hill. Countries are increasingly telling the US to take a hike (the South American summit was merely the latest example) when we ask/tell them what we would like. This does not look like ascendency to me.

State of the nation: Are things being kept in good nick, is the government functioning effectively, is the populace happy, are they doing well? The answers are no, no, and no. Our infrastructure is crumbling, our government is in gridlock, and half of our population is on or below the edge of poverty. Ascendent? I don’t think so.

Can we protect the country? Oh, yeah. We’ve go the world’s most bad a$$ military. Do we really know how to use them and what their limits are? Surely you jest.

You be the judge.

Posted by majkmushrm | Report as abusive

Most Americans, politicians and public, are convinced that ‘we are the best simply because we are Americans’. Facts don’t enter into it. And the bigger the problems become, the more the right wing grows and accuses everyone else of being a traitor if they point out the problems. Americans have gotten out of the habit of competing, and instead indulge in the blame game: All of the problems are the fault of others. Empires come and go. The Soviet system lasted only 70 years, Chinese communism less than that. In the modern global age, nothing lasts for centuries. To me the problem is not whether America is dominant, but whether America can do a reality check and get back in the game as a great player.

Posted by steve778936 | Report as abusive

The concept of American exceptionalism will survive in many people’s minds, despite any amount of evidence to the contrary, simply because it feels good to be better than someone else. If it’s a fantasy, then some are willing to go through all kinds of tortured logic and contortions to shape reality until it matches the fantasy. Its the same reason racism holds on with such tenacity. I’m pretty certain that Obama doesn’t really believe that we are holding steady, but to admit our decline would be political suicide.

Posted by spall78 | Report as abusive

World domination has its advantages when it comes to trade and economic vitality, but it also has it’s drawbacks.

I have to admire the Swiss. They have never been a world power. They don’t participate in wars, their economy just steams along for the most part and the people who live there are predominantly healthy and happy.

Posted by breezinthru | Report as abusive

That’s what happens when the political party of fiscal rectitude adopts trickle-down, Laffer curve, voodoo economics as its foundation.

Posted by borisjimbo | Report as abusive

Absolutely correct. Good article.

If you subtract government workers,retirees and welfare recipients,there just aren’t enough producers in the US.

Then subtract millions of students to the total who are wasting their most productive years listening to professors drone on about subjects they will never use. .

Those who are left have to make enough to support the non productive people and have enough left over for the money lenders who also live off the production of others.

Posted by billionstars55 | Report as abusive

@majkmushrm

But you left out the most important power: military. I know we’re getting a little war weary, but that’s cyclical.

Posted by PCScipio | Report as abusive

The most damaging aspect to our economy, and every other country’s, the basis for our strength, is the proliferation of multinational corporations which do not care about which country will benefit from their enterprises, if any.
This in turn is steadily leveling off the economic gap between poor and wealthy nations. However another not so obvious direct effect of the multinational corporations is that the gap between the rich & the poor is widening in every country, which means that these mega corporations are becoming economically independent from any country while making their profits from the countries that are the most profitable for them.
Simply put, corporations are becoming their own countries.
Some of today’s mega corporation worth is already more than that of many small countries.

Posted by GMavros | Report as abusive

Lots of talk. When a country leaves the protection of God and embraces the greed of the other side, you can expect a downward spiral to the bottom. Then the country can either decide to languish in its poverty of spirit, or come to terms of who is really in charge here on the earth. The scenerio we are seeing now is the same as in the 1930s when the “Pillars of Industry” were touted to being indestructible. They fell down then,and they will again, as the making of money is held in greater value than being a good citizen or company.

Posted by fred5407 | Report as abusive

It isn’t decline if the tall man finds himself surrounded by others still capable of growing.

The tall man was using lifts he devised with economic data that favored his peculiar way of life. For example: a country with a more sedentary population (the same size) living in a very substantially built and much older environment would not appear as prosperous (in GDP figures) as the US, where the people move a lot more and can pay tens of thousands for cheaply constructed mobile homes. The high cost of real estate is not much of an indicator of economic muscle. It is mote a measure of inflation.

BTW – The Dutch used to have a global trading empire that was lost decades ago and yet Rotterdam is still the

Posted by paintcan | Report as abusive

…largest port in Europe.

Posted by paintcan | Report as abusive

The ultimate cause of American decline has been the crumbling of American unity and uniformity. We are no longer a unified society. Our rulers, who are the possessors of political and financial wealth, have become as detached from the least wealthy 90% of the people as a village chief in New Guinea. We are simply not the same people any more.

Without self-rule, America is nothing. All of its strength comes from the independence and freedom of its ordinary citizens. The rest is nothing more than the self agrandizement of a Tiffany’s or some other creator of decorative baubles. And the liberty of the ordinary man has been taken away, for this short term reason followed by that. Now it is gone and we are subject to body cavity searches to use public transport and subject to summary execution without trial of any sort. Our prisons are full of people whose crime was trying to experience self-pleasure. Most for this reason. We have a Government of wars — wars on drugs, wars on Islam, wars on terrorism, wars on this and wars on that. War as an excuse to override the freedom of the people.

No. America is not declining. It has already declined to the point where it is no longer recognizable except to those holding its head beneath the water. It is already over.

Posted by txgadfly | Report as abusive

[...] Bernd Debusmann | Analysis & Opinion | Reuters.com The Kagan article, now expanded into a book ( The World America Made ), is reported to have so impressed Obama that it influenced his State of the Union Speech in January, when he said “Anyone who tells you that America is in decline or that our influence has waned doesn’t know what they are talking about.” They don’t? Here’s the view of Clyde Prestowitz , a labor economist and veteran declinist, weighing into the debate in April: “You’d have to be blind not to see the deterioration of our infrastructure. [...]

It’s over for me.

Nearly 40.

Unemployed.

A bachelors, two masters and a JD and I can’t find a job.

I recently applied for a job in Philadelphia for 49k a year as a web developer. I know HTML, JAVA, designed a web site for Con Edison. I have the required degree.

I sent a resume, letters of recommendation and a great cover letter.

I’ll probably never hear back from them.

I’ve been doing this since 2007 – when I lost my job. I was so discouraged that in 2009 I went back to school to get that 2nd masters. Rutgers University good grades.

Does it matter? Well I graduated in October and I’ve received over 2000 rejection letters – those kind enough to write / call me back.

How am I supposed to pay back my 140k in Federal Student Loans.

Working at McDonalds for 7.25 an hour?

Yea, for me America is way over.

Posted by Lord_Foxdrake | Report as abusive

From a holistic perspective it appears that the United States is a sick man with the rather broad economic statistics being thrown around. Indeed, there is truth in many people’s testimony and experiences within society of their inability to locate suitable work, the issues surrounding massive foreclosures, the decline of urban centres, the disappearance of the influence of industrial auto centres such as those in Detroit and the list goes on. However, America remains a great country and is in ascension not decline because of its secular values, strong democracy, inventive institutions, the continued application of applying the rule of law, its melting pot of peoples form various places around the globe and many other factors to numerous to mention here. The American people have choices unavailable to many others living in a quagmire of corruption, deceit and tyranny. Yes, it is true that the middle class in America has been eroded considerably and that opportunities no longer seem limitless to some [Were they ever?].

Unlike younger demographically weighted societies like many which exist in the emerging economies the older generational classes in the U.S. may see the eroding and at times disappearance of certain ‘traditional’ ways of life and institutions as the decline of American society. What may truly be the case is that society is being changed by technological and economical shifts and forces which appear to be sending the country into decline but in fact they are transforming American society faster than many would like. With this transition does come a deal of unfortunate pain which the public and private sectors need to minimise or dissipate.

I acknowledge that there is great economic pain being experienced by many individuals however, Americans are known for a great existential and collective national spirit and will maintain their nation’s global hegemony.

Posted by Birddog14 | Report as abusive

The real cause of American decline is that vast swaths of the American public spend too much time wining on the internet, and too little time being awesome.

Be awesome.

It is the right thing to do.

Posted by effoff | Report as abusive

America’s decline and fall is due strictly to an uninformed electorate. Ask any teacher anywhere and you’ll find consistent data that very few Americans know anything at all of substance regarding history, geography, the world, various cultures, language, etc etc. That is why Americans are so easily duped by the fascists (Republicans) on one side and the socialists (Democrats) on the other side. There nothing our so called leaders ever articulate in terms of Vision, Mission, Strategies, and Tactics and what is worse is that Americans don’t even know enough to demand it. But, that’s the way it works – - no nation lasts forever and the USA is best current example of that fact.

Posted by explorer08 | Report as abusive

Good read Bernd and I would suggest the answer is both. Our decline is myth AND reality. Take young Effoff and Lord Foxdrake for example. One believes in America and believes in himself. Be good humans, do our best, be awesome. It’s not so hard really. The other believes our goose is cooked, we are done for, why even bother trying.

I’m in the former camp, I believe in America. Our work ethic, our natural resources, our sense of humor and fair play. That the American Dream has shrunk is undeniable, but it is still a very very good dream.

Negativism serves no good purpose, never give up, never surrender.

Posted by CaptnCrunch | Report as abusive

@CaptnCrunch – and never be unemployed, and never get old, and never get sick, and never run out of gas or steam or find you are running on empty and never ever really think or read a history book.

And under no circumstances – never consult an economist.

It can’t be both myth and reality or neither term has any meaning.

Posted by paintcan | Report as abusive