That’s the state that America has been reduced to, particularly since the global economic crisis began. Though the trouble has spread through nations like a virulent contagion, everyone knows exactly where it started.
Global anti-Americanism is feeding on the fact that the U.S. is buried in debt, and that the free-market orthodoxy it has embodied is a proven failure. The worse the global economic contamination grows, the more that foreign nations are taking the opportunity to condemn America for its flaws and demand that it submit to their will.
And the United States—broke and utterly dependent on foreign creditors—has little choice but to submit. As it does, more and more it is looking like a jilted and desperate lover.
Just look at its efforts to pretty itself up for potential investors and allies.
Keeping Creditors Happy
One stunning example occurred at November’s G-20 summit, a meeting of the world’s 20 largest economies, called for and led by Europe.
Clearly, continental politicians see the economic malaise as their opportunity to seize center stage from America. Europe’s elite went into the G-20 meeting with a long list of demands for new strictures and international oversight to be placed on America’s economy. “Times have changed,” French President Nicolas Sarkozy explained. He said that at the expense of the dollar, “Now the euro and other currencies have a place in world financial exchanges, a new reality that he said should be reflected in the rules.” He spoke for many European leaders in saying, “We demand to be heard, and quickly”—after all, “we know where [the problem] started.”
Those demands were definitely heard. At the summit, U.S. President George Bush agreed to subject America’s regulatory agencies to international scrutiny. In effect, this will delegate regulatory oversight to foreign bureaucrats, giving them power to demand changes in the way America does business. Dick Morris explained the agreement this way: “The results of the G-20 economic summit amount to nothing less than the seamless integration of the United States into the European economy.”
Why this breathtaking concession? To placate foreign nations. It was a tacit admission of America’s loss of prestige and its need to keep everyone happy.
America is desperate for foreign money to support its broken economy. In September, China passed Japan to become the U.S.’s largest foreign creditor. “China’s new status—it now owns nearly $1 out of every $10 in U.S. public debt—means Washington will be increasingly forced to rely on Beijing as it seeks to raise money to cover the cost of a $700 billion bailout,” the Washington Post reported. “The growing dependence on Chinese cash is granting Beijing extraordinary sway over the U.S. economy.”
Just how extraordinary? To take a recent example, one reason the government stepped in to rescue Fannie Mae and Freddie Mac—a move that got the federal government in the mortgage business and put taxpayers on the hook for $5.2 trillion—was to protect foreign, particularly Chinese, bond holders—so they would continue to purchase U.S. treasuries.
The U.S. has also taken several steps to make it easier for foreign companies and governments to purchase U.S.-based corporations. Most recently it has encouraged foreign nations to purchase stakes in U.S. banks. After all, it wouldn’t want to offend its creditors. How could America ask them to lend their money but not allow them to purchase U.S. assets?
One shocking move by American leaders to try to preserve the flow of foreign investment has been their embracing of sharia finance—banking considered lawful by Muslims. In November the Treasury Department sponsored an “Islamic Finance 101″ course to educate government officials on the particulars of the system. More and more sharia-compliant companies and funds are popping up in the States, meaning that money can flow into America from cash-rich oil potentates in the Middle East, for example.
All that Americans have to do in return is to ensure the money is used in accordance with Islamic law. But as Rachel Ehrenfeld, director of the American Center for Democracy, says, that’s no small concession. “[I]t’s our money and we shouldn’t be abiding by Islamic laws. Period. I don’t want to have any kind of association with any laws that dictate wife-beating in Saudi Arabia,” she said. She and other critics also contend that the sharia requirement of “zakat”—money for charity—ends up funneling funds into the spreading of radical Islam and even terrorist activity.
Many are the ways that America is dolling itself up in order to attract the attention of foreigners. In an effort to appear more sound financially than it actually is, the government has changed the way it calculates many of its economic statistics. It chronically underreports the rate of inflation in order to make its treasuries more appealing. It heavily massages the unemployment statistic in order to present a better economic picture. In reporting its budget, it skews the picture by ignoring many “off-budget items” that would expose a much larger deficit. It raids Social Security funds, without which the government would have even larger deficits. All of these actions contribute to preserving foreign investment—for the time being. In reality, of course, they’re nothing more than—forgive the expression—lipstick on a pig.
A Stunning Prophecy
America’s growing desperation not only highlights just how much power the U.S. has already lost, but it also accelerates the loss of power.
Nevertheless, we can expect such actions to increase after the transition in the White House. After all, Barack Obama’s election victory was, certainly in part, a statement that Americans want to bury the prototypically American but globally unpopular leadership of President Bush in favor of the more cosmopolitan and internationally attractive face of a man with Kenyan blood.
Europe certainly has cause to rejoice in the inauguration of a president who has graciously urged Europeans to assume “the burdens of global leadership.” The European commissioner for external affairs is looking forward to a “more balanced relationship” between Europe and America (translation: more European power; less American power). Russian President Dmitry Medvedev is convinced Obama will change America’s mind about stationing a missile defense shield in Eastern Europe. Many nations are eager for a world with an Obama-led America much less convinced of its own exceptionalism. And Obama seems eager to oblige them, in an effort “to regain America’s moral stature in the world.”
This trend points to the fulfillment of a stunning and vivid prophecy recorded by the Prophet Jeremiah.
Speaking of the modern nations descended from ancient Israel, of which America is currently the most geopolitically prominent, the prophet said, “And when you are plundered, what will you do? Though you clothe yourself with crimson, though you adorn yourself with ornaments of gold, though you enlarge your eyes with paint, in vain you will make yourself fair; your lovers will despise you; they will seek your life” (Jeremiah 4:30, New King James Version).
Hardly the outcome America is hoping for. But, given the trajectory of current events, not at all unpredictable. ▪