By Michael Hendrix, Research Manager
Is it half-time in America? Is our country facing an inevitable decline? Not if Clint Eastwood has anything to say about it. Somewhere between the Star-Spangled Banner and New York’s triumph in this year’s Super Bowl, Eastwood’s gravelly voice emerged to pitch cars “imported from Detroit.” This wasn’t any normal ad though. Clint Eastwood was making a statement about America’s place in the world. He said unequivocally that it’s indeed “half-time in America.” That “people are out of work and they’re hurting too,” but “all that matters now is what’s ahead and how do we come from behind.”
Eastwood honestly couldn’t have picked a better time to make these statements. For the past month, pundits have begun to react to those who argue that America is in decline, that our competitors are nipping at our heels, and that the world’s economic doldrums are symptomatic of a deeper systemic decline in the West. One author in particular, Robert Kagan, took it upon himself to refute these arguments. He may be no Eastwood, but Kagan’s voice is coming through loud and clear for all those who say, as Eastwood did, that America’s best days are ahead of it.
Is America in its twilight years? Robert Kagan doesn’t think so.
In the eyes of Robert Kagan, the challenges that America faces today are great, but they only seem overwhelming if we forget much of American history. It seems that every forty years brings a fresh set of concerns that appear to portend the twilight of America’s dominance. These are not just modern concerns. Kagan even quotes the 18th century American patriot Patrick Henry who “lamented the nation’s fall from past glory.” Nevertheless, considering whether America is in decline is vitally important for the future of the global economy and its political order.
Those who take shots at America’s preeminence have no shortage of fodder. The global financial crisis of 2008 not only helped precipitate economic devastation but seemed to throw into doubt the free enterprise system itself. Our political order hasn’t fared much better amid constant evidence of political gridlock. What’s more, all of America’s greatest efforts still can’t seem to stitch together a fractured Middle East. Then there’s “the rise of the rest.” Nearly simultaneous with America’s stagflation in the 1970s, a group of “Asian tigers” — South Korea, Taiwan, Hong Kong, and Taiwan — charged ahead into the elite grouping of high-income countries where their neighbor, Japan, already resided. They were soon followed in the 1990s by the terrific economic growth of the BRIC countries: Brazil, Russia, India, and China. Even our allies in Europe joined together to form a common economic union that could stand beside the United States in demographic and economic might. What was once a golden age of American dominance in the 1950s seems to have become mired in a sticky swamp of faded empire.
The only problem is that the picture of American decline is incomplete at best. Our economy may be battered, but it still stands tall with a steady 26% share of global GDP. While I can’t defend our political system against all of its critiques, it must be said that gridlock and indecision have long been the hallmark (even the purpose) of American politics. There’s nothing new on the Hill in that respect. Farther afield, America’s apparent lack of influence in the Middle East today seems like a quaint notion when compared to the 1970s, when Arab nationalism blossomed into embargoes and revolution. America’s brand image has always appeared tarnished to its detractors, even as very American brands like Pepsi thrived and thought leaders opined on our “soft power” abroad. The truth is that there has been no golden age of unrivaled American dominance; ”the record is mixed, but it’s always been mixed.”
What is America’s place in the world?
Kagan then looks specifically at America’s geostrategic position in light of China. America can no longer boast of its spot ahead of a pack of lesser powers. The rise of China is great and it’s real. China is far richer and more dynamic than the Soviet Union ever was during the height of the Cold War. Even more so, the “Beijing Consensus” seems to resonate in a world where smaller powers yearn for the same state-driven growth and (relative) stability that China boasts. The notion that the gravity of China’s ideas and industry would lead countries to fall into its orbit didn’t seem far-fetched back in 2004 when Joshua Ramo first articulated the finer points of the Beijing Consensus. Except that we haven’t really seen that occur. As Michael Beckley points out, “China’s growth rates are high because its starting point was low. China is rising, but it is not catching up.” Furthermore, there isn’t what one could call a Chinese sphere of influence outside of the Shanghai Cooperation Organization and assorted trade links on the Malay Peninsula and in Africa. America’s greatest rising competitor reaches about as far as its checkbook can go. China’s geostrategic position is quite difficult too, especially in light of the American influence that surrounds the country on nearly every side, from our giant base in Okinawa to our friendship with burgeoning India.
Even if America boasts an enviable spot in the world, what of our country’s capacity and capability to operate in a world full of emerging powers? Some speak of imperial overstretch — even hubris — in a time of yawning budget deficits. Kagan’s reply is deceptively simple: Abandoning our global presence will cost us far more than we will ever save by abandoning our commitments abroad. What is more, America’s military forces represent an ever smaller fraction of our total population, while our military’s budget is still far below its point throughout much of the Cold War.
Decline isn’t inevitable
To Kagan, the real concern is the infectious notion that America’s decline is somehow inevitable. Rather, there’s much in our nation’s history to show that even in our darkest hours we are a resilient and resourceful people. Many emerging countries will continue their rise, sometimes to greatness. By their incorporation into a global network of trade and institutions, together with America’s continued support of the world order that it helped create, a growing world can be seen as the ultimate win-win. America will emerge absolutely stronger as others grow in a relative sense.
Three specific trends portend America’s continued dominance. First, America’s total debt is declining as a share of GDP. Ken Rogoff’s This Time Is Different showed how financial crises usually saddle countries with debt deleveraging over the span of years, even decades, beyond the original crisis point. Yet, as the McKinsey Global Institute reports, “Historical precedent suggests that US households could be as much as halfway through the deleveraging process.” Second, our manufacturing sector is actually doing better than ever, prompting another consulting firm to declare an “American manufacturing renaissance.” Third, the growth in shale gas and oil is combining to give America greater energy security than we’ve enjoyed for decades.
America may be down, but we’re not out. As Clint Eastwood concluded, “Yeah, it’s half-time in America. And our second half is about to begin.”