As the United States shutdown nears its bitter end, the global flood of American-induced hysteria is subsiding – but beneath the tainted waters a new current is gathering force, one directed away from American shores. Call it Plan B.
The warring parties in the United States Senate announced a deal at mid-day Wednesday to raise America’s legislated debt ceiling, end the government shutdown and avert a default on Thursday. Senators thanked each other with emotional displays of civility. Congress showed signs of coming to heel.
Even as America’s default seems to have been averted, the political brinksmanship and the shutdown prove that Plan A – the global economy’s longstanding default mode based on American economic might, the American currency, and American governance – has failed. The country’s domestic row has quickened the seachange already underway in global political and economic currents.
“The world has reacted mostly with disbelief that the reigning superpower could fall into such dysfunction,” observed a New York Times World-section report, citing sources in several countries aghast at American politics and policies.
Schadenfreude is evident in the jubilation expressed in some quarters:
“Global financiers look to de-Americanize,” crowed a headline in RT, the Russian government-owned global news agency. RT quoted a statement in China’s government press agency Xinhua that America “put many countries who hold state assets in dollars at risk.” The Chinese source declared: “several corner stones should be laid to underpin a de-Americanized world.” One such cornerstone, said RT, is an agreement by the European Central Bank and the People’s Bank of China “to start supplying each other with their currencies, avoiding the dollar as an intermediary currency.”
What Plan B will look like is not clear. It’s also not clear who, if anyone, will replace America’s role in the world – but “the new major powers are also becoming increasingly self-confident — and sometimes form a united front against the West,” noted an essay in Germany’s Der Spiegel. Meanwhile, America should no longer have a veto on important global bodies such as the International Money Fund, argued Columbia professor José Antonio Ocampo, former Under-Secretary-General of the United Nations for Economic and Social Affairs. “Our globalized world deserves a better international monetary system.”
Even America’s most faithful of friends are seeking alternatives to its hegemony. Numerous sources report an announcement is soon expected of a new bilateral free trade agreement between Canada (until recently America’s largest trading partner) and Europe.
“The erosion of American power is happening faster than most of us predicted – while the politicians in Washington behave like rutting stags with locked antlers,” wrote British historian Timothy Garton Ash in the Guardian this week.
*UPDATED October 17, 2013
Copyright © 2013 Deborah Jones