The end of the Wall Street world
Daniel Korski 3:18pm
Over the last decade, Wall Street has become an important foreign policy actor in its
own right, almost as important as the lobbyists on K-Street and the White House on Pensylvania Avenue. The ebb and flow of capital has been a decisive international force in determining the fate of
nations - most recently illustrated in the cases of Greece and Ireland. As an aide to President Clinton once said: in a second life he would like to come back as the bond market.
But Wall Street has influenced foreign policy in a deeper way too: by changing the way that successive US administrations see the world. Not by focusing on the bottom-line. International relations cannot be reduced to cost/benefit analyses. But by making the US look at partners the way Wall Street looks at companies - by growth rates and future share of markets rather than history and market capitalisation.
So, European allies are boring. While they represent the world's largest market, they are not growing rapidly like China. China, in turn, is exciting because of the expectation of continued expansion. The same could be said of Brazil, Russian India.
This obsession with growth, which has been transplanted from Wall Street to Washington, speaks to something deep in the US national psyche: it recalls the pioneer spirit America was built on. China, Brazil, India and Turkey are brash, loud, young and colourful - much as the US likes to see itself. Europe is, by contrast, conservative, monochrome, old and uninteresting; it has accordingly been relegated in the US hierarchy of interests.
As Mark Leonard puts it: the US has become a part-time European power for the first time since 1916. The US president could for example not bother to come to Spain to meet European leaders last year. Early on, the concerns of eastern Europe about Russia's aggressiveness we're given the presidential "talk to the hand" sign: a visit by Vice-President Joe Biden.
But the Obama administration is slowly discovering (to paraphrase the old saying) that all that grows ain't gold. Though China and the other BRICs remain important these countries cannot be relied on to pursue policies which safeguard the US for example on Iran or the US dollar. For that, the US needs old allies in Europe.
When Barack Obama came to power much was made of his post-European (or, as some argued in Standpoint, his anti-European) viewpoint. But in the last two years of his (first) term of office, things will change. The US will continue to court the BRICs, but as US strategist Joseph Nye says in the latest issue of Foreign Affairs: "Europe (and Japan) provide the largest pools of resources for dealing with common transnational problems". There may be no bell to sound the end of the Wall Street worldview, like the one that opens NYSE. But make no mistake: it is quickly ending.
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Rhoda Klapp
November 23rd, 2010 3:33pm Report this commentToday's BRIC is tomorrow's PIIGS,
Craig Strachan
November 23rd, 2010 3:38pm Report this comment" China, Brazil, India and Turkey are brash, loud, young and colourful"
By population profile, perhaps. In terms of the venerability of civilisation, probably only Brazil could be considered "young".
yank
November 23rd, 2010 3:55pm Report this comment"The US will continue to court the BRICs, but as US strategist Joseph Nye says in the latest issue of Foreign Affairs: 'Europe (and Japan) provide the largest pools of resources for dealing with common transnational problems'".
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Yeah, right. Like the people here actually care what "US strategist" geeks are bleating about in Foreign Affairs magazine, particularly as regards their geeky bleatings over "common transnational problems".
I'd remind you Spectator types that stringing together a few buzzwords and plastering them into a blogpost does not useful and coherent commentary make.
justathought
November 23rd, 2010 4:19pm Report this commentIt is debatable whether the bottom line no longer influences US foreign policy. After years of war Americans are questioning the expense of these adventures. Obama knows many seats were lost in the recent elections because the perception that war is diverting resources from the economic front line at home.
As for the US dollar it seems that Wall Street is indeed dictating a policy change towards currency devaluation in exasperation at the Chinese intransigence .
AlanL
November 23rd, 2010 4:26pm Report this commentYeah - the US wishes it was youthful, growing, positive balance of trade, budget surplus.
Unfortunately, it is like the sad middle-aged man. Initially desperate to hang with the new kids, and dis the grandparents.
Only now, he has realised he has more in common with his parents than his kids. And realises he'd better build bridges if we are to make common cause together.
Obama - finally growing up. Brings a tear to your eye.
Verity
November 23rd, 2010 4:47pm Report this commentGood for you, Craig Strachan! India has had a civilisation, and physicists for around 4,500 to 5,000 years.
TomTom
November 23rd, 2010 6:07pm Report this commentBarrack Obama was funded by Goldman Sachs. His Chief of Staff was ex-Goldman. The Us thought Finance was the future and Manufacturing the past so it sold itself to buy FOREIGN manufactured goods and pauperised its population.
It served the purposes of the Financial Interests and made them rich but has made the US likely to face another civil war if the trend continues.
Having benefited enormously from two world wars which destroyed the hated British Empire the Us emerged as the world's largest Creditor nation: it is now the world's largest DEBTOR nation.
US foreign policy is a disaster. It is taunted by North Korea and does not inspire awe in the Middle East. Only awe and fear are substitutes for war and the USA has squandered its status over 30 years on living high on the hog and giving technology away to Asia. It has run itself as an Oligarchy just like Putin's Russia and reverted to the world of the 1800s especially in terms of income distribution
Baron
November 23rd, 2010 8:57pm Report this commentwhether the BRICs succeed only the future will tell, the aspirants though have a key thing in common, they’re as hungry as America was in the past (and she made it) before she began obsessing with wealth distribution rather than wealth creation; embracing noble, emotionally charged tenets of political correctness, multiculturalism, moral equivalence and stuff didn’t help either; and it shows, what’s the point of building and maintaining a mammoth military advantage when the will to apply it is missing? What a waste to squander the proceeds generated by financial might on enlarging the backsides of the great unwashed.
for a young American to learn mandarin may not be a bad move, I reckon.
TomTom
November 24th, 2010 7:13am Report this comment"for a young American to learn mandarin may not be a bad move, I reckon."
Timothy Geithner did....in Peking.....enough said !
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