Date
16 October 2018
Washington's broken political system is affecting the rest of the world as well. Photo: Bloomberg
Washington's broken political system is affecting the rest of the world as well. Photo: Bloomberg

Washington gridlock leads to US paralysis overseas

Ever since the Second World War, the United States has played an indispensable role, ensuring peace and order in the world and creating conditions that allowed the revitalization of the war-torn countries of Europe and Asia. During the cold war, of course, the US also expected beneficiaries of its public goods to line up on its side against the Soviet bloc.

For this, the world by and large has been content to exist within a Pax Americana where Washington largely set the rules, because the rules benefited not just the US but other countries as well.

It was under this US-led system that China was able to grow phenomenally over the last 35 years, with America opening its markets to Chinese products, without which such explosive growth would have been impossible.

But the US has always had an isolationist streak, and that, plus superpower hubris, caused it to arrogantly, often cavalierly, put its own interests ahead of those of its friends and allies. In Washington’s eyes, it seemed, if other countries didn’t like it they could lump it.

An early example of this attitude was in 1971 when John Connally, then Secretary for the Treasury, told European finance ministers worried about the export of US inflation that the American dollar “is our currency, but your problem”.

The global financial situation has been transformed since then. While in the early 1980s the United States was the world’s biggest creditor nation, by the end of the decade it had become the world’s biggest debtor, with Japan playing the role of America’s banker.

On the surface, the US economy was booming but the country was piling on trade deficits and foreign debts until, in the mid-1990s, the US experienced its first government shutdowns, precipitated by budgetary differences between the Democrat-controlled White House and the Republican-controlled Congress – a precursor of the crisis this month, which showed the rest of the world just how dysfunctional America’s political system has become.

The Republican Senator Arthur Vandenberg showed good sense when he said in 1947 that “politics stop at the water’s edge”, meaning that politicians should present a united front to other countries.

Nowadays, however, some American politicians, hoping for partisan advantage, have no compunction about showing the rest of the world just how divided the country is and are also willing to tarnish the reputation of the US and damage its credit standing.

In his remarks on the reopening of the government, President Barack Obama said the government shutdown had “inflicted completely unnecessary damage on our economy” and slowed its growth.

“The American people,” he said, “are completely fed up with Washington.”

The same can be said of the rest of the world. While the American people are responsible for electing their politicians in the first place, non-Americans also have to suffer the consequences of Washington’s broken political system.

China, meanwhile, is waiting in the wings for its cue to play a greater role whenever the US stumbles. On the financial side, it is working diligently to internationalize the renminbi.

During the deadlock, China demanded that the US guarantee the safety of its investments. More significantly, the Xinhua News Agency published a commentary asserting that “US fiscal failure warrants a de-Americanized world”.

The Global Times newspaper warned that a default “would be a clear signal that the US is heading toward collapse”.

While this latest crisis is over, another may well emerge early next year. Unless the US is able to manage its problems, more people will agree with the Global Times’ description of America as a “once powerful nation”.

Damage to the US is difficult to quantify. However, Obama’s cancellation of his Asian trip, which would have taken him first to Malaysia and the Philippines and then to the APEC meeting in Indonesia and the East Asia Summit in Brunei, led to some humiliation for the US.

As they say, a picture is worth a thousand words. If Obama had been present, his would no doubt have been a dominant presence.

As it was, his representative, Secretary of State John Kerry, despite being six foot four, was barely visible in the official pictures. In the APEC photo, he was on the far right in the back row, while Chinese President Xi Jinping was on center stage, next to the host, President Susilo Bambang Yudhoyono of Indonesia.

Things were not much better at the East Asia Summit. China’s Premier, Li Keqiang, stood in the center linking hands with Hassanal Bolkiah, the Sultan of Brunei, while Kerry was way off on one side.

Obama will need to mend fences in Asia, and soon.

Frank Ching opened The Wall Street Journal’s Bureau in China in 1979. He is now a Hong Kong-based writer on Chinese affairs.

[email protected], Twitter: @FrankChing1

RC

Frank Ching opened The Wall Street Journal’s Bureau in China in 1979. He is now a Hong Kong-based writer on Chinese affairs.

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