Possibility for Obama’s Re-election Running Low

With none other more powerful, Standard & Poor’s is the Hercules of the economic world. It only removed one letter A from America’s credit rating and the whole world shook, leaving the global capital market bleeding and cowering in a corner. Dumbfounded investors felt desperate and confused, as if it were the end of the world. The existing bailout policy in Europe and America cannot stop the world economy’s decline anytime soon, and it will take a while to restore the world’s deflated confidence. Standard & Poor’s heavy blow certainly will not hinder the world economy’s progress forever, but it surely has reset the starting point for the future economic development at a rather low level. It seems that the world economy is becoming more and more unstable. Before long, people will finally find out whether it is because of the natural loophole of the world’s economic system or whether it is because of malicious manipulation by an invisible hand. Surely it is not Adam Smith’s hand.

China will not take active measures this time to save the market as it did when it reacted to the 2008 financial crisis. Strictly speaking, the financial crisis triggered by subprime lending is purely an economic issue, only a disastrous effect of the reckless expansion of loans in the process of quick economic development. Everyone can see the positive effect of the 4 billion RMB investments made by the Chinese government on the people’s livelihood project. Currently, the rising inflation rate may be a bit worrisome for the decision makers of that 4 billion RMB, and to this day, the People’s Bank of China is debating the so-called excess liquidity. China’s 4 billion RMB project has indeed won the world a short period of stability, and this has added points to the executive force of the Chinese government. However, if people take a look at the continuous rise of the CPI in China this year, they may wonder whether this is just another Pyrrhic victory.

Unlike the financial crisis, the current sovereign debt crisis can be wholly attributed to the defects of America’s political system. Congress and the Democratic and Republican Parties are all too greedy, striking to fulfill their own interests. Negotiating the debt ceiling and only reaching an agreement at the deadline shows that, in America, an agreement made this way is totally reasonable. Following endless debate up to the last second of the allowed game time, the two parties will then shake hands and make compromises standing on their own bottom lines. All of these are tricks of the U.S. government, not the plans of Standard & Poor’s, which is considered to be an academically independent upholder of justice. It warned the government four months ago that the only way to protect America’s 3A rating would be to cut back $4 billion in financial deficit over the next 10 years. Because the actual number is only half of what Standard & Poor’s expected, its authority has thus been looked down upon by Congress; however, most countries in the world still believe in the science of this credit rating drop and they all conform and make pessimistic forecasts about America’s economic prospects. The 2008 financial crisis seems to be returning in full swing under disguise.

As a main critic of Chinese politics, America has recently been causing troubles for China around the Taiwan Strait and the South China Sea. Although China is the biggest oversea buyer of America’s bonds and the depreciation of the U.S. dollar will inevitably lead to the slump of China’s per capital consumption power, it still has not inspired China to join the stable market of the G7. This is because, in theory, the economic turmoil is America’s fault, after all, and with tricky economic consequences to deal with, America is less focused on pressuring China’s politics. America has been suppressing China’s power in the world political arena with its superior political status, and as a consequence, China has been quite isolated with very limited space. But now the so-called superior political system has backfired, and its own economic consequences are better left for America itself to handle. We will not say that China is gloating, but both of the two most recent economic disasters originated in the affluent western democracies. This has intrigued people into doubting the credibility of the so-called “all-powerful political system.”

Since Obama was sworn in, he has been struggling with America’s economy and after a two-year attempt, he finds himself still caught in the same old mire. In one year, one president can hardly make America’s economy rocket up dramatically to its previous level. Even if organizations continue short-selling like crazy and support Obama in a third round of quantitative easing to maintain a bleak economic environment, America’s economy will keep staggering under the restrains of debt, environmental protection, social welfare, military expenses and the next deadline of the raising of the debt ceiling.

Israel made the latest compromises to the Arab World to lessen America’s political and economical burden in the process of its anti-terrorist battle, but its positive effect needs time to reveal itself. As China is not that friendly with America, China will probably choose to look on from the sidelines and let the already fragile market continue its downward trend, just to enlarge the defects of America’s political system. What’s more, Obama’s meeting with the Dalai Lama, supporting Japan in the Diaoyu Islands Dispute, carrying out military drills with the Philippines and Vietnam in the South China Sea, signing treaties with and selling arms to Taiwan have all disappointed China. China might as well just stand aside and leave America’s economic problems to the U.S. government itself. Everyone knows that China is suffering from rising domestic inflation anyway, which gives China a good excuse for not being helpful.

Obama’s biggest success may be bringing down bin Laden, but the Islamic world, with democratization raging, will not choose to follow a president who lost America’s hundreds of years long credit rating of 3A in one term. The reason they embrace western democracy is for its prosperity. Most Americans may have a fairer understanding and kinder judgment of President Obama, but, for them, the lack of a good political system guiding the economy is more unbearable than the long-criticized non-democratic system in East Asia. In the future, what will trouble voters is that the merits of the president’s personality don’t seem to help him yield more fruit in political and economic development. China’s passive attitude as an onlooker creates negative prospects for America’s future economic development, whether Obama secures another term or if one of the Republican candidates takes his place.

The possibility of Obama’s reelection is rather low. Although devoted and assiduous he may be, Obama wasn’t born in the best time to be a president. He has to honor the promise America made to Taiwan, but he also wants to spread American values to the world and steer the world economy into the way America wants it to be. China has opposite interests in many fields and a deep grudge seems to have developed in Sino-U.S. relations. It would take a miracle for China and America’s politics to radically change, just as America’s economy needs a miracle to recover. If Obama wants to continue his political career, he should also hope for a miracle.