Wednesday, June 29, 2005

Following the news over the past few weeks, one gets the distinct feeling that this government, has done more than any in the recent past to weaken the position of the US in the world. On the one hand is the burgeoning fiscal deficit, financed by emerging markets, primarily China which is working hard to maintain its currency so that its exports are competitive. On the other hand is the weakening military, which has its hands full in Iraq and is finding it increasingly difficult to keep going there. If a new threat opens up elsewhere, the military is too stretched to act with vigor and decisiveness.

Then of course is the all-important issue of energy security. China is bidding strongly for Unocal. With other aggressive moves in Iran and Central Asia, and India too making its moves there, America is not the only high-roller in town with the dough to pay for oil anymore. While drilling in the Arctic may sound cool, it is not going to be enough (not at the rate SUVs sell in the US). The biggest producer of oil outside the Middle East is Russia. Russia will obviously sell to the top bidder, and with the money China controls, the US may be left with a real energy crisis. With a move on Maytag (a known name in the US to anyone who's been to a Laundromat), they are charting new horizons in branding. They aren't happy selling in Wal-Mart or Target under American or Japanese brands anymore. A great article by Paul Krugman describes most of these issues pretty well.

Additionally, Bush's new Energy plan has no new ideas, offering even more sops for the oil industry and not enough for renewable fuels. While the whole country's economy and infrastructure is based on cheap oil, not enough is being done to ensure its availability.

The US' stay at the top of the food chain is not under danger by any standards. However, they are maneuvering themselves into a corner where there isn't much room for any... um... maneuvering anymore. The blockheads on Capitol Hill are extremely savvy at obfuscating the real issues for the electorate(W in a second term is enough proof of that). However, that doesn't mean they should lose sight of it themselves.

The US better pray that things go according to plan. A single untoward incident on the global geopolitical scene over the next few years could bring this pack of cards crumbling down.

2 comments:

gawker said...

Just yesterday on Lou Dobbs on CNN, Rep Hunter (R) was whining about China making a bid on Unocal, and how this is contrary to American security, how this will empower China and what not. What he did not say is how much China has already been empowered by all the loans it is providing the US to tide over the massive war deficits. Just like a republican to whine about something while glossing over something else more important

Cathy said...

Spot On !!