Reply #21: The Decline of the American Empire Who's Calling the Shots Now?

[seemslikeadream]

http://www.counterpunch.org/lindorff03182009.html

The Decline of the American Empire
Who's Calling the Shots Now?

By DAVE LINDORFF

It may not be obvious today, and certainly it’s not how the corporate media reported it, but future historians are likely to look back at March 13, 2009 as the day that American imperialism began it’s inexorable decline. That’s the day that Chinese Premier Wen Jiabao announced that his country was “worried” about its holdings of over $1 trillion in US treasury securities, and warned that he wanted the US to assure China that it would maintain its good credit and “honor its promises” and “maintain the safety of China’s assets.”

There is no way that the US can accommodate Premier Wen and still finance and operate a global military system with over 1000 overseas bases, massive aircraft carrier battle groups, and with hundreds of thousands of men and women armed to the teeth with the latest high-tech military hardware, not to mention fight endless wars on the far side of the globe.

What China is doing is pulling the rug out from under America’s six decades of global military dominance. It is no coincidence that the weekend before Wen’s statement, Chinese naval vessels aggressively harassed a US intelligence ship, the Impeccable, that was operating in the South China Sea.

The implied threat in Wen’s seemingly mild comment was that if the US doesn’t trim its deficit spending dramatically, and get its economic house in order—which means dramatically reducing the American standard of living, and reducing wasteful spending of its military, China will simply cut back on its funding of the US deficit, in the form of buying US Treasury issues, an act which would cause the collapse of the US dollar and what’s left of the US economy.

Now this decline of the US as an economic and military power is not going to be an overnight thing, because China needs to keep selling manufactured goods to the US market—the largest in the world—and in order to do that, it needs to keep recycling dollars spent on Chinese goods back into the US, which to date has meant buying US debt issues.

But there are other ways to recycle dollars back to the US, most notably by investing in actual US assets. To date, China has done this cautiously, in part to avoid arousing political concern in the US. Typically China, when it has purchased shares of US companies, has done so by buying small minority stakes, as it did in the case of the Blackstone Group, a private equity investment firm. But if China were to decide to stop funding America’s massive deficit, this could change. It could decide to just let the dollar slide, and take advantage of the slumping value of US assets to start buying the US up on the cheap.