Regaining America's Footing in

Summary of Remarks

In the final session of the Real State of the Union, panelists challenged US foreign policy to adapt to major impending shifts in geopolitics and geo-economics.

Many have used the Roman Empire as an analogy for America's role in the world today. The "triumphalists" declare that the United States is at the peak of its rule while the "declinists" warn of impending ruin. Michael Lind rejected both of these extreme interpretations, arguing that the United States will continue to be a major and significant force, albeit just one of several in a multipolar world. Although the U.S. is the only nation capable of projecting its military power across the globe, Lind argued, it has failed to translate its military might into influence and leverage in diplomatic and economic arenas.

Lind also drew attention to the fast-growing populations and economies of India and China. As their wealth increases, so will their power in the world. According to Lind, this will have two major consequences for U.S. foreign policy. First, U.S. traditional Western allies will be of diminishing importance. Second, the U.S. will be forced to reconsider its blanket opposition to regional hegemony.

Sherle Schwenninger warned that the nation's focus on a "heroic foreign policy" has led to the neglect of two issues that are central to America's position in the world, national security, and economic well being: oil and the dollar. Schwenninger described major shifts that have occurred in the international financial system and global oil market. In both cases, he argued the new order will be detrimental to US interests: the new orders are based on neither market principles nor managed governance, they will diminish U.S. influence, and they will render the US less economically secure.

After twenty years of successfully managing global oil prices, the U.S has recently alienated key oil producers (Russia, Venezuela and Iran) and lost the confidence of key consuming economies. Schwenninger described a future, dual oil market in which the alienated producers enter into preferential, long-term supply arrangements with untrusting consumers, leaving the United States to absorb price shocks in the shrinking general market.

Following the Asian financial crisis, most of the big Asian economies have turned away from capital liberalization. Instead, in order to ensure advantageous trade relationships and a competitive economy, they have pegged their currencies and built up their currency reserves to support the dollar. The result, Schwenninger cautioned, is an international financial system based on mercantile principles and controlled by Asian economies. Schwenninger argued that this has reinforced an already unhealthy balance in which Asia produces, the U.S. consumes, and Asia foots the bill.

Finally, Robert Wright argued that the world's perception of American legitimacy at the grassroots level matters to national security. Negative attitudes toward the United States fuel terrorist recruitment. Also, as many nations are democracies, garnering the cooperation of governments will increasingly require earning the respect of their citizens. Moreover, due to technological advances, leaders can now be in touch with public sentiment on an hourly basis.

This change will force the United States to rethink its foreign policy, Wright predicted. During the Cold War, the winning strategy was to ensure nations either liked you or feared you, but the calculation is no longer that simple. Now, if by making some countries fear the United States, the negative repercussions within that populace may outweigh any benefit.

In order to increase its legitimacy, Wright urges the United States to utilize and nurture the evolution of multi-lateral institutions, which have been deemed legitimate avenues for the exercise of power and influence. Like Lind, Wright expects America's economic and military might to wane. Therefore, it will be in the United States' interest to develop a world in which having predominant force is not a prerequisite for defending national security interests.

Synopsis written by Robynn Sturm, Research Associate at the New America Foundation

Participants

• Michael Lind
  Whitehead Senior Fellow, New America Foundation and Author of What Lincoln Believed: The Values and Convictions of America's Greatest President


• Sherle R. Schwenninger
  Director, Bernard L. Schwartz Fellows Program


• Robert Wright
  Senior Fellow, New America Foundation


• Steven C. Clemons
  Senior Fellow and Director, American Strategy Program, New America Foundation