When faith in US is shaken, not stirred

The Republican attempt to block President Barack Obama’s health care plan by linking it to the raising of the debt ceiling – an unrelated issue – was a cynical ploy whose immediate victims were American workers furloughed by the partial government shutdown. The larger pool of victims included people around the earth, who watched aghast as the most powerful leader in the world was stymied on home turf by a wilful minority in the US Congress.

This crisis is over but history might repeat itself. The national debt represents a weapon that can be used to achieve almost any political purpose. This is a cautionary thought for people and governments which believe in Pax Americana. They rightly feel the post-War era of international peace and prosperity, secured by and anchored in the military and financial muscle of the United States, is just too important to be held hostage by a bunch of politicians in Congress playing Russian roulette with the economy.

Little wonder then that some have been prompted to call for steps to be taken to counter such congressional antics. The rather shrill cries to “de-Americanise” the world, made by Chinese media, are a case in point. As the largest foreign holder of United States Treasury bonds, Beijing is acutely aware of how vulnerable its economy is to Washington’s mercurial politics. It is worth remembering though that China was drawn to the US precisely by the fundamental strengths of its economy, not only the largest on earth but also innovative and diversified enough to act as a global anchor. America’s corporate movers, whether titans or start-ups, are underpinned by a research and development base that is being renewed constantly in the country’s world-class universities. De-Americanising the world would come at considerable cost to all.

But diversifying the global economy is another matter, and timely too with the emergence of powers such as China, India and Brazil. These emerging powers will push for a new order in which the developing world gains greater clout at the World Bank and the International Monetary Fund. A new international reserve currency might also be on the agenda. Each time American politicians misbehave, they nudge others to look beyond Pax Americana.