The U.S. economy is in turmoil. It is widely expected that the ongoing inflation, the highest in 40 years, will lead to an economic recession. There are voices worrying that this may lead to a downfall of the world economy as well. U.S. President Joe Biden is making excuses. He released a vague statement that recession is “not inevitable.” But he was unable to say with certainty that there will be no recession. There was no sign of the confidence he displayed when he proudly declared that “America is back.” Instead, he directed blame at Russian President Vladimir Putin, claiming that Russia’s invasion of Ukraine has worsened inflation. What Biden did is what a leader should never do — refuse to take responsibility.
Of course, saying that Biden did nothing in response would be wrong. He spoke with former Treasury Secretary Larry Summers, who warned about inflation a year ago. It was a quick move to prevent public opinion from worsening after Summers stated, “There is no historical precedents for inflation at the rate we now have to come down to the target the Fed has set of 2% without a recession.” However, with former Fed Chair Janet Yellen as his Treasury secretary, Biden made no changes to his policy. On Twitter, he complained that the media is not reporting his accomplishments on the front page.
Summers’ view on the faltering U.S. economy is a relatively optimistic one. Many experts on international politics are predicting a sharp decline in U.S. power. Joseph Stiglitz, a professor at Columbia University and Nobel laureate, said in a recent column that while the U.S. has been “clearly number one” since the fall of the Iron Curtain, “it is simply inevitable that China will outstrip the U.S. economically, regardless of what official indicator one uses.” He argued that the U.S. may lose to China in the new Cold War from a geopolitical standpoint as well. He pointed out that while the U.S. was trying to teach other countries what is morally right, China has built its influence by investing in the infrastructure of developing countries. He stressed that the U.S. should make its social, political and economic system look attractive, instead of only attempting to sell its products to other countries. The U.S. should assist developing countries not only with the world’s best bombers and missiles, he said, but also through “soft power” such as intellectual property rights.
Stiglitz’s criticism might resemble the Putin regime’s arguments condemning the U.S., but it is based on factual evidence that we should not ignore.
Some say that Pax Americana is heading toward an end. Mark Leonard, director of the European Council for Foreign Affairs, predicted in a Foreign Affairs article that the international security order will be reorganized, citing the decision by Germany and Japan to increase defense spending after the Ukrainian war. He argued that we are nearing a world where the U.S. is no longer in charge of everything, but will have to share its power with its key allies in Europe and Asia, which are Germany and Japan respectively. His logic seems to imply that the U.S. has no choice but to return to former President Donald Trump’s “America First” policy, contrary to Biden’s promise.
South Korea is facing an even bigger issue. Whether it’s economics or diplomacy, Korea relies too much on the U.S., or more precisely, Biden. Although the Korean economy is sure to heavily fluctuate depending on the Fed’s interest rate hike, there is no clear solution to this problem. The Korean government has been too explicitly pro-U.S. in terms of diplomacy as well. It may be unrealistic to expect that Korea will be able to be on good terms with both sides like India, which is a part of both the China- and Russia-led BRICS and the U.S.-led Quadrilateral Security Dialogue. But it should carefully consider its interests and act fast before it’s too late. If you start making excuses, you’ve already failed.