Sunday, September 28, 2008

America at Nadir

Every country faces such points in its life from time to time. In 1989 with Tiananmen Square Massacre raging, China saw a lowest point in her recent history. The short lived ugly coupe by remnants of former Soviet Communist Party in 1991 saw Russia’s nadir before Boris Yeltsin heroically founded the new republic. For Indians, 1984 when Indira Gandhi was killed or in 1992 when assault on Babri Masjid happened; those were the darkest periods.

With fracas of Bush’s White House meeting to avert an already embarrassing situation of belly up Wall Street in full public view; America has reached her ‘nadir’ in recent times. Whichever way one cuts it, this was very bad week for America. Paul Krugman aptly described, as the original Congressional bailout plan fizzled, America has become the ‘banana republic with nukes’. Damning indictment.

It is not just Paul Krugman’s of the world of who describe America’s descend into hell. If one hears or read Nauriel Roubini; that is not a surprise. In normal times, utterances of Iranian President Ahmadinejad against America will be wore as ‘badge of honor’; but during this week when he declared America’s demise atop UN General Assembly; it sounded like ‘even he would kick the can of America’. Meanwhile Europeans are getting it too – German Finance Minister claiming in parliament that 2008 would be regarded as the year when America lost its financial super power status. Granted, the finance minister is from Social Democratic Party; the party who puts the Russian hack Gerhard Schroder as its supreme leader in past. But still it is hard to ignore the sense of demise of an era when Wall Street Investment Bank sharks roamed the oceans of money and dominated the world finance.

We have Niall Fergusson promptly arguing in Washington Post that Pax American may be over. We have EJ Dionne arguing in Washington Post how the American Capital has looks of a ‘war time capital’; unfortunately not necessarily the winning side. He has been the only journalist pointing to the possibility of why Congress is in total fearful mood – the fear of China pulling the rug under America’s financial edifice using the leverage of Trillion Dollar trade surplus it has acquired over years. The immediate provocateur was Chinese directive to Chinese banks to stop lending money to American Banks. America is on the borrowed time in that world view and hence the scrambling of Congress to give the blank check of $700 Billion to Treasury with the hope, possibly a vain hope, to battle out these foreign financial challenges while mopping up ‘subprimes’ at home.

The classic sign of a state’s fall is when her top leaders engage in fratricidal politics. There is no other way than to describe the stupidity and brazenness of America’s leading Senator (John McCain) in sabotaging the bailout deal – the deal which is expected to save the last vestige of America’s financial fa├žade. Granted, rank and file Congress members were not on the board (and still not); but the failure of Congressional GOP Leadership, ‘my presidential campaign first’ attitude of McCain and blatant manifestation of America’s President as the sitting lame duck unable to control a simple meeting; it all resembles the beginning of decline of an empire. All shameful and disgrace.

The question is where does America go from here? Like UK in stabilizing her ‘reduced status’ in world affairs or once again redeems herself from the brink of irrelevance it has brought herself or yet another tragic possibility where it compounds her problems, a la Bush Iraq war style? North Korea is on the verge of getting nukes as well as Iran. Wall Street has crumbled and bridges on America’s highway are crashing too. Tsunami of Federal deficit with the possibility of worthless Dollar is on way. There does not seem to be any end in sight for Iraq and Afghan wars. And meanwhile the Rovian divide of ‘Blue and Red America’ continues apace. There is no more ‘morning in America’ left.

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