America’s relative rise

By Ian Bremmer
April 19, 2013

Since midway through George W. Bush’s tenure, there’s been a steady hum from the pundit class that America’s best days are behind it. An overreaching foreign policy, rising public debt, and a growing wave of outsourced jobs means that America will soon lose its status as the world’s preeminent power. America was quickly on its way to becoming Rome.

But the American Decline is now over (if it ever really began in the first place).

Compared with other major powers, America’s future is looking brighter than before the financial crisis. The dollar remains remarkably attractive relative to other currencies. This resilience extends to American companies. In a March report, Goldman Sachs found that foreign investors owned a larger percentage of the U.S. equity market than at any time in the 68-year history of the study. The housing market is picking up, and dependence on foreign energy is falling.

Gridlock remains the order of the day in Washington, and Congress still has record-low approval ratings. But there are policy bright spots. Congress and the administration are not standing in the way of America’s energy revolution. The Keystone XL pipeline will likely be approved. The pipeline, along with the Obama administration’s emphasis on energy independence, helps strengthen the domestic economy.

On trade, the administration has managed to convince Japan to join Trans-Pacific Partnership talks. Should the trade consortium of countries ranging from the United States and Chile to Canada and Mexico to Singapore and Vietnam get off the ground, it will liberalize trade between members that represent nearly 40 percent of global GDP — and boost American trade and manufacturing. Then there is the nascent transatlantic equivalent that Obama mentioned in this year’s State of the Union. 

The third major policy positive: the forward movement in Washington on immigration reform. If that effort is successful, it could entice millions of illegal immigrants to pay U.S. taxes for the first time — and it could provide the labor force, skilled and unskilled, that many companies desperately need to ensure growth. A recent study by the Center for American Progress found that immigration reform could inject more than a trillion dollars into the U.S. economy.

So at a time when recession-riddled Europe is muddling through, and major developing economies like China have huge looming question marks, the United States is looking pretty good from the top down.

Now for the bad news: Things don’t look as good from the bottom up, because an empowered minority at the top of American society will reap most of the benefits of this resurgence. The number of Americans who have participated in the rebound is smaller than in the past. Corporate profits remain high, but so does unemployment. According to a new study by a pair of economists at Northeastern University, those unemployed for more than six months have an especially tough time returning to the workforce.

It’s not easy for a country with such disparities to maintain prosperity and domestic tranquility, but there is no guarantee that the benefits of even an extended rebound will narrow the growing wealth gap. 

America’s decline is a myth. The United States’ relative position in the world is improving, and Washington won’t stand in the way. Some of the gains we see will improve the U.S. standard of living at every level: Cheaper energy means less pressure at the pump, and a comprehensive immigration reform bill could empower many yet-to-be Americans who deserve a voice. But for still-jobless and underemployed Americans, it’s the recovery that’s a fiction.

Welcome to America’s relative rise: Wall Street is back. Main Street? Maybe not.

This column is based on a transcribed interview with Bremmer.

7 comments

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Some people do well, because the have education and real skills and continue to educate themselves constantly. Others assume that the guidance they get from media sources such as newspapers is correct. However, it is really just brainwash. You’ll be fine with an true education and thinking for yourself. Depend on others for your thoughts and opinions and you’ll always be the victim. The american decline will continue until we require real education and not just compliance and comformity.

Posted by brotherkenny4 | Report as abusive

mm hm

Posted by bryanX | Report as abusive

Please, sir, send me some of your rose-colored glasses or the wacky-tobacky you are smoking. Better yet, get out of your ivory tower and talk to the 60% of middle-class people who have lost their jobs, being replaced with a 58% INCREASE in lower-paying jobs.

Posted by AZreb | Report as abusive

YEAH, Saudi Arabia also has the same type of recovery, but it only benefits a few.
The US is in decline. We will not become a poor country, but we will lose our power. We are just too stretched thin.

And has everybody forgotten, we a practically bankrupt. We have too much debt.
But as Cheney said it best “Deficits don’t matter”………..

Posted by KyleDexter | Report as abusive

Another point of optimism I would add is the success of the US federal system of governance. So even while many rust belt states are suffering from bad policy and economies that aren’t productive, the sunbelt states have been able to introduce innovative policies that help pull us back up. Some of those policies might work, and some might be disasters. But compare this to other countries that have no way to experiment like this, and I’d say our system is better and more adaptive.

Posted by Andao | Report as abusive

Trying to understand why making 10M+ illegal aliens (IAs) citizens helps. How many unemployed does the US have? Over 10M, right? Why can’t they do the jobs currently being done by theIAs? Because they don’t pay enough and/or poor working conditions. What happens when the current IAs become citizens and they no longer need to work under those conditions? Will we bring in 10M more? The obvious answer is the jobs in questions need to pay a rate that attracts legal US citz. Should a strawberry picker make more than a CPA? Perhaps. Let the market decide. Arguments that we need more people or that we need to grow the economy are so far away from reality – what you are saying is we need to figure out how to dig things up faster and turn them into garbage, carbon, mercury….and all the other things we are running out of space for. We need to make things better; not bigger. GDP growth is a measure of how fast your slice of the pie is getting smaller – look at wages. Want wages to go down, bring in more workers! How do we deal with the current IAs. Enforce the 2ndary border – the employer-employee interface.

Posted by brazil_83 | Report as abusive

Gee, have you reviewed the number of people on food stamps or the lowest employment participation rate since the 70′s, or China replacing the dollar’s international currency status with its own agreements with India, Japan, Australia and others. Opec accepting gold instead of dollars for oil.

You need to look around a little if you think our status in the world is not declining.

Posted by niblick3 | Report as abusive