By James Pach, Special to CNN
Editor’s note: James Pach is the Tokyo-based editor of The Diplomat, an online magazine focusing on the Asia-Pacific. The views expressed are his own.
“Americans can always be counted on to do the right thing, after they have exhausted all other possibilities.” That Churchillian quote is a useful one to trot out as Washington fumbles in its uniquely Washingtonian way towards what those of us in the rest of the free world (yes...we’re still here) would consider common sense.
It’s also quite patronizing. With his stature and his American mother, Churchill could probably get away with it. For everyone else though, it presupposes that political dysfunction only happens in America. And for all the Schadenfreude-tinged harrumphing in foreign capitals, that’s clearly not true.
Take Japan, with seven prime ministers in seven years, public debt climbing past 230 percent of GDP, and a sizeable chunk of one prefecture uninhabitable for the foreseeable future. Too easy? Then try China, where despite runaway, credit-fueled growth, an estimated 500 mass protests take place each day as the population grapples with rampant corruption, choking pollution, food safety scandals and a diabetes epidemic. Or look at Australia, the Organization for Economic Cooperation and Development’s star performer. After six years of Labor government, Canberra has earned a reputation as the world’s coup capital. America’s post-racial moment may not have made it out of Grant Park, but Australia’s post-misogyny moment never happened at all. Europe? Euro.
Even America’s lurch to the right is not without its parallels. In an excellent article in the New Yorker, Adam Gopnik suggests that the “real analogue to today’s unhinged right wing in America is yesterday’s unhinged right wing in America. This really is your grandfather’s right, if not, to be sure, your grandfather’s Republican Party.”
And in this post-Lehman Age of Disenchantment, conservatism is making a comeback abroad. Both Australia and Japan, for instance, have recently elected their most conservative leaders in recent memory. This is not to suggest we’re in for a 1930s rise of fascism, but it’s not surprising to see a backlash against bailouts and Keynesian stimulus. It’s hard to explain debt on the basis of the crises it avoided.
Of course, the American political system has its quirks. The multi-year, billion-dollar campaigns to elect a president who cannot make laws are fun. The hatred directed at healthcare legislation that is simply a halfhearted stab at systems used successfully for decades in a number of America’s closest allies – where healthcare costs are lower and outcomes substantially better – is baffling. And the fact that 20 percent of Republicans think the president is the Antichrist is downright disturbing.
But assuming the deal gets done, default is avoided and the government goes back to work, then foreigners will quickly move on from this latest conniption. Too much to worry about closer to home. Nor will Asia shun the U.S. just because Obama skipped a couple of talkfests. Doubtless he was missed at APEC, but I suspect his peers were mostly envious that he got to skip the silly-shirt photo-op.
The much ballyhooed pivot to Asia, meanwhile, is not so much Washington pushing, as being pulled. Witness East Asia’s rediscovery of the U.S. in 2010, when a rambunctious China dropped the “peaceful rise” narrative. Beijing can go on a charm offensive in Obama’s absence, and it will do deals – money talks, after all – but the reality is that China’s growing power leaves most of the rest of Asia deeply unsettled, and China is still today without any true ally.
So all okay then? Yes, but with a few caveats.
First, if the U.S. were actually to default, then disregard the above. The consequences would be dire and Washington would not soon be forgiven. However, while I accept that the reality-free wing of the Republican Party might be prepared to dance Gollum-like into the fiery chasm, I don’t for a moment think that the president would hesitate to deploy at least one of his options for unilateral action.
Second, however, it’s not just enough to avoid default. All this mucking about with the full faith and credit of the United States government has implications. Use U.S. Treasury bills as the football in a game of brinkmanship and the risk-free rate (which is usually the rate on those bills) will not look so risk-free to investors after all. And if it rises, then so will many other interest rates worldwide, which are essentially the risk-free rate plus a risk premium. At a time when the world is trying to pay down its debt, that would be painful. It also puts more pressure on central banks to keep the spigots open, raising the inflation specter.
Finally, while I’ve argued that other countries shouldn’t be too smug, these shenanigans do have an impact on American power. Sure, the U.S. has its armed forces, but the last decade has shown the limits of what even the world’s most powerful military can do on its own. In the postwar world America has achieved far more – really, nothing short of the construction of the postwar international system – on the strength of its credibility. The term used these days is Joseph Nye’s “soft power,” but I’m really referring here to something more elusive, what both John F. Kennedy and Ronald Reagan called a “city upon a hill,” or a beacon of democracy, governance and capitalism in a troubled world.
In Kennedy’s words, America’s “governments, in every branch, at every level, national, state and local, must be as a city upon a hill – constructed and inhabited by men aware of their great trust and their great responsibilities.” Half a century later, that might seem a little too Arthurian; democracy is messy after all. But it was the aspiration that won America its loyalty overseas. Why snuff out the embers?