U.S. Credit Downgrade and American Supremacy

The global financial market was shaken after the international credit rating agency Standard & Poor’s first-ever downgrade of the U.S. credit rating from the highest AAA grade to AA+. It is natural for the financial market to be so rattled at the downgrade of the world’s largest economy.

What is going to happen to the United States, which, since the Soviet Union collapsed 20 years ago, has been enjoying its status as the sole superpower? Some see this as a prelude to the impending collapse of the American supremacy, yet others see the credit rating downgrade as merely a hit to American pride and predict an insubstantial impact.

What is really going to happen? The bottom line is that, even this time, U.S. supremacy will emerge relatively unscathed. As the New York Times columnist Paul Krugman pointed out, S&P is not a company in a position to assess that the U.S. credit rating is poor. S&P holds a significant portion of the blame for Lehman Brother’s bankruptcy in 2008 and the foreign exchange crisis in Asia in 1997. The reason for my belief that U.S. supremacy is not going to change is simple: The world is not yet prepared for a post-America era, in which the U.S. would no longer hold its dominance as the sole superpower.

In the 2000 U.S. election campaign, Republican candidate George W. Bush claimed that Democratic President Bill Clinton was “squandering” his eight-year tenure by not seeking a new international order. Bush was agitated by emerging voices in Europe publicly opposing American supremacy.

President Bush took the 9/11 terrorist act as a chance to push the world to either side with or go against the United States, and the Afghanistan and Iraq invasions were mostly driven against the backdrop of his obsessive paranoia for a new international order. However, his efforts to perfect U.S. supremacy failed in the two wars. Instead, the U.S. lost the support of the international community, and its dominance weakened. In the end, like his predecessor, Clinton, Bush was just squandering time.

In early 2009, when the pro-internationalism Barack Obama took office as president of the United States, the world held a huge expectation for a new international paradigm. However, President Obama only had an image [of a new paradigm] and did not show how his leadership would be able to subdue the powerful voices of the U.S. extreme right. It is rather questionable that President Obama originally did not even have the slightest intention to assert American supremacy as the sole superpower.

The problem is that even though the U.S. has been plagued with troubles endangering its continued economic and international political supremacy, presently, no new paradigm can replace its position. Whenever an important issue occurs, other countries show duplicitous faces by customarily blaming the U.S. while simply waiting for the U.S. to make a move, instead of worrying about how the issue could be resolved.

The bankruptcy of Lehman Brothers is a good example. When the global economic crisis struck, many countries expected the establishment of a new monetary management system to replace the Bretton Woods system. In the end, though, virtually nothing had changed. The U.S.-led International Monetary Fund (IMF) remained and even kept its tradition [of having a European as managing director] by appointing another French native, Christine Lagarde, to succeed Strauss-Kahn, who had to resign due to a sex scandal. At some point, the concern for regulating the global financial market, which has turned into a speculators’ playground, disappeared from the list of top concerns. Instead of blaming Wall Street speculators for the financial crisis, the world turned to concerns for stimulating the world’s economies. Unfortunately, the world missed the opportunity to arrange for a new international order.

What about China, the U.S. counterpart in the G20 countries? Even if one insists that China is still just a developing country, it is demonstrating absolutely no determination to share the responsibility of world leadership. The same goes for Europe. The European Union, led by Germany and France, is fighting a leadership struggle while grappling to find the key to solving the economic crisis plaguing eurozone countries like Greece and Spain. Also, even though these countries express their discontent with the Arab democratization movement or the Israeli-Palestinian conflict, they are only watching the U.S. stance on the issues.

Even if one wants to bring down the American supremacy, circumstances do not permit it. It is, however, a U.S. issue, and the U.S. has no choice but to take the main responsibility in sorting it out. How should we deal with this latest development? Do not act rashly; calmly watch how the situation unfolds, and note whether it is time for a mid- to long-term change in international order.