Today's Opinions, Tomorrow's Reality 

The Resilient Empire

By David G. Young

Washington, DC, January 3, 2012 --  

America's withdrawal form Iraq is a symbol of the nation's resilience, not its decline.

When the last American troops left Iraq last month, things went bad quickly. Within hours of the departure of the last soldier, Iraq's Shiite strongman, Prime Minister Nuri al-Maliki, produced an arrest warrant for his bitter rival, Sunni vice president Tariq al-Hashimi on charges of terrorism.1

The Vice President's flight to the autonomous Kurdish region raised tensions even more. He was given refuge by Iraq's Kurdish President, Jalal Talabani2, who wields little power in Baghdad but maintains de-facto control over the Kurdish region that has been poised to secede since the American invasion. Then 14 bombs went off across Baghdad on December 22, and another one north of the city on Sunday.3,4

This dramatic and rapid unraveling of Iraq's American-imposed democracy makes a mockery of America's onetime plans to remake the Arab world. For America, bad news from abroad and a weak economy make for a depressing mood reminiscent of 1980.

Back then, Carter-era stagflation gripped the economy at home and foreign policy disasters embarrassed the country on the world stage. The national mood probably reached an all-time low in April, when eight Americans died in a failed mission to rescue the 52 hostages then held at the embassy in Tehran.

This year's news is not as extreme, but similarly bad. In addition to the unraveling of Iraq, America's credit rating has been downgraded, economic growth remains weak, and unemployment hovers stubbornly near nine percent. These conditions have given America's critics and naysayers extra fodder to declare an end of the American century, and predict a long-term decline in the world's leading country. Aside from a retreat from Iraq, these critics almost always cite the rise of China as a global competitor.

But these critics, like all prognosticators, should be careful. Similar criticisms where heard thirty years ago, right before a two-decade long boom in the American economy that coincided with the collapse of America's superpower rival. In his 1979 "Malaise Speech," President Carter bemoaned an "erosion of confidence in the future" and noted that "for the first time in the history of our country a majority of our people believe that the next five years will be worse than the past five yearsÉ The productivity of American workers is actually dropping."

To depressed Americans, a vision of the coming economic boom would probably seem far-fetched. Back then it was not China, but Japan that was challenging America's economic dominance. In January of 1980, Chrysler had to take a $1.5 billion bailout from the federal government in the face of unrelenting Japanese competition.5

Americans in 1980 could hardly imagine that the Japanese industrial economy was nine years away from a severe recession and subsequent decade-long stagnation. And most had not even heard of a pair of small but growing companies on the west coast, Microsoft and Apple, which today have combined market capitalizations of $6376 billion and have profits that dwarf those the automakers had even in their heyday7-10.

Despite short-term conditions, America was stronger, and its competitors weaker than almost anyone believed.

Without question, today's conditions are far better than in 1980. The solutions to America's fiscal problems are limited solely by the absence of political will, and should consensus emerge, these problems can be solved virtually overnight. Sustained unemployment, while painful workers with skills ill-suited to the modern economy, will vanish as the dead weight ages out of the workforce.

In terms of world rankings, it is inevitably true that as poorer Chinese join the world economy, the nation of 1.3 billion people will surpass America on a number of metrics. Last year, for example, China become the largest energy consumer in the world.11 Given a Chinese population that is over four times larger than America's, a China that only manages to grow a quarter as rich will become the largest economy in the world. Clearly, this is something to welcome, not dread.

China's rise from poverty doesn't mean America will lose its wealth or economic leadership. The American Midwest has a larger population and larger economy than California -- yet few Californians would trade their leading role in technology and entertainment for one in agriculture or automotive manufacturing.

In terms of foreign policy, the Obama administration's withdrawal of troops from Iraq and Afghanistan is long overdue to end the expensive and politically counterproductive military actions of the Bush administration. While America's critics have gleefully seized upon its withdrawals as a chance to gloat, the reality is that ending these foolish engagements is a decisive correction that will make America stronger, not weaker.

Of course, nobody can tell for sure what the future will hold. Over the very long term, all powerful nations decline and many cease to exist. But to predict the imminent decline of the most powerful nation on earth simply because of a few items of bad news show up in a given year is to be a foolish student of history. America's resilience is bound to disappoint its critics yet again.


1. Al Jazeera, Rivals say Maliki leading Iraq to 'civil war', December 28, 2011

2. Newsweek, Iraq's Fugitive Vice President, January 2, 2011

3. The Telegraph, Baghdad bombs Q and A: What is happening in Iraq? December 22, 2011

4. The Washington Post, Leading Sunni official in Iraq hit by roadside bomb, January 2, 2011

5. St Petersburg Times, Chrysler Redesigns Itself As Well As Its Car, May 13, 1980

6 Google Finance. Market cap of apple $411.2 billion, Microsoft $225.7 billion, January 3, 2012

7. Bureau of Labor Statistics, Consumer Price Index - All Urban Consumers, as retrieved January 3, 2012 (December 1979: 72.6, November 2011: 226.2)

8. CNN/Money, Fortune 500 1979 Full List, as retrieved January 3, 2012 (Profits: GM $3.5 billion, Ford $1.6 billion)

9. Ibid, Fortune 500 2011 Full List, as retrieved January 3, 2012 (Profits: Apple: $14 billion, Microsoft $18.8 billion)

10. Author's conversion of combined Ford and GM Profits in 1979 to 2011 Dollars: (3.5+1.6) x (226.2 / 72.6) = $16 billion. This is less than half the combined profit of Apple and Microsoft at (14+18.8)= $34.8 billion

11. USA Today, China surpasses U.S. in energy consumption, July 19, 2010