America as Scapegoat and Last Best Hope

It could be called the summit of ironies: Angela Merkel and Nicolas Sarkozy again made quite clear that the United States was to blame for all the evils of the financial crisis (while failing to mention that European companies were also wildly spinning the speculative roulette wheel of global finance themselves).

Too greedy, too much borrowed money, too much consumption – those made up the three charges against the Americans. But they love the fact that America is trying with everything in its power to haul the world out of recession – even if they’re doing it with more borrowed money and more consumption incentives.

Everything has changed: the world is seeing the end of an era in which the United States served as a role model and the rest of the world confidently followed its example. At the same time, everything remains the same: the world hopes the United States will turn out to be the driving force behind the global economy while they prefer to stay politely in the background. It’s the St. Florian Principle of international politics where the other guy pays and everybody else reaps the profits. (Trans. Note: St. Florian is, among other things, the patron saint of chimney sweeps and fire fighters. A popular rhyme in German-speaking countries goes, “Oh, Holy St. Florian protect my house from burning down; burn down someone else’s instead!). In London, the Europeans rejected American efforts to get them to pump more money into their economies, although British and Americans, and French and Germans managed to come to a mutual accommodation on the subjects of financial market regulation and cleaning up tax havens. At any rate, the most important nations agreed to significantly pump up the International Monetary Fund. That will benefit those countries closest to insolvency.

The London G20 was one of those tentative beginnings attempting to bring new order to the world. The crisis plus two wars threaten to overextend the United States as the leading economic and global peacekeeping power. There is as yet no other nation on the horizon capable of not only exercising power, but assuming responsibility for the monetary costs as well. The principle of collective leadership managed to function somewhat in London because the enormous pressure of the current problem drove the leaders together. That will most assuredly not last. And what then? Does everybody look to Washington once again?

The crisis has taught the Americans humility, and in Barack Obama they have a president who credibly embodies that virtue. It’s a good opportunity to emulate the old American traditions. Historically, it’s always been an American strength not to bark orders at others, but to rally nations together for everyone’s benefit. The Chinese, with their isolationist and nationalist elites, as are yet incapable of this, as are the Russians, whose strategic thinking is still stuck in the zero-sum games of the 19th century. They, like Brazil and India, will have their hands full for years to come with their own developmental problems. And Europe has become too old to harbor global political ambitions. Sure, America is faltering. But for lack of good alternatives, the reins of world power will continue to be held in Washington for many years to come.