I Told You So

Me, November 18, 2008

The best justification for keeping a large Leviathan is to end conventional war. Essentially, the US can use its military power to make the cost of waging aggressive war against another sovereign state unacceptable. This provides the global public good of security, because when states do not have to defend themselves, or spend funds appeasing dangerous neighbors, they can concentrate on economic growth.

Russia’s invasion of Georgia is a great (perhaps fatal) challenge to America’s role in keeping the peace. By allowing that Saddam Hussein with a slavic name to occupy Georgian territory, we make every state think twice about the “peace” that the world loans us so many billions to uphold

Tom Barnett, November 13, 2009

For some American economists and politicians, a weak dollar signals a weak American economy. “Duh,” you say? Well, their larger argument is worth considering: By acting like just any weak economy (deficit spending plus currency devaluation), we speed up the world’s movement toward a post-dollar era that, once reached, will never be reversed. Take away America’s ability to float debt cheaply, and you take away much of our ability to play globalization’s Leviathan, both kinetically and diplomatically.

The counterview, of course, is to insist that America has taken that role about as far as it can go historically, meaning we can’t get any more over-leveraged as an economy or more over-stretched as a military power. So while, yes, it would be nice if Obama could correct all our excesses of the past couple of decades while preserving our preeminence, it’s just not going to happen. The sad truth is that America is finally acquiring the financial discipline that we’ve sorely lacked in the post-Cold War era, in large part because our enormous success in spreading globalization — especially to our new banker China — made our loss of self-control all the more feasible.

2008 was one of the worst years in American history. The one-two punch of Russia’s Invasion of Georgia and Wall Street’s Raid on the Treasury may have permanently ended America’s ability to keep the peace in the world of globalization. While some bloggers called such a view “hysterical” last year, now they repeat it as if it is an original idea.