It seems like in the last few years, the cracks were really starting to show in American dominance. The bungling of the COVID response, the BRI and BRICS chipping away at US trade and currency dominance, the failure of Ukraine to repel Russia, inflation and shortages in the imperial core, etc.
But it seems like many of these cracks have been patched up this year. I’m not sure how much is just propaganda, but economic indicators show that inflation in the US has cooled, unemployment is the lowest and the labor force participation rate is the highest they’ve been in decades (even accounting for underemployment/gig work), and real wages have increased amongst the poorest and richest alike (albeit unequally so).
US energy prices are dropping. US oil production is at an all time high, and the US is refilling its strategic reserves at a lower prices than it released them for. OPEC can’t retaliate without taking a huge hit to their economy.
Infrastructure, historically a big issue for the US, has been looking better as the Biden administration passed several huge spending packages to improve train networks and other things.
Ukraine is losing but the US has only spent a small fraction of what they did in Afghanistan, and they’ve debt trapped Ukraine in the process. The Israel-Palestine conflict has certainly turned sentiment against the US but it hasn’t resulted in any material change in relations.
China’s economy is stumbling; although there’s not a recession per se, unemployment is sky high, consumer confidence has taken a hit, and investment has slowed. Interest rates are about 3.5% in China while they’re about 5% in the US, which means China has less room to perform expansionary monetary policy than the US.
The US seems to have gained ground in trade relations. Several countries have pulled out of the BRI. Countries like Mexico, which for a while had China as their biggest trade partner, once again have the US as their biggest trade partner. FDI in China has slowed. “De-risking” and “friendshoring” have started yielding results. I know in the long run this will also weaken imperialism as it develops the productive forces of countries like India, Mexico, and Vietnam, but it might take a long time; even highly-industrialized countries like Japan, Germany, and south Korea are still subservient to the US.
People have completely forgotten about the US’ shit COVID response, but Chinese citizens still bear resentment towards Xi and the central gov for the zero-COVID policy, and the uncertainty over lockdowns was a contributing factor towards the reduction in investor confidence in China.
So overall, things don’t look too bad for the US, while they’re looking a bit uncertain for the other emerging “poles” like China, Russia, and the Middle East. I suppose the silver lining is that a lot of these gains came at the expense of gutting the economies of “allies” like Europe and south Korea, which means that the US won’t have as much to easily prey on next time.
What are your thoughts?
The USA is going through a transition of the dominant party that is mainly driven by demographics. This has led to a more unstable political situation than when a party collapses due to an internal collapse. The last shift like this sparked the American Civil War, so politics has degenerated to a level where armed political conflict is becoming more likely.
Economically, the USA seems to be doing a lot better. Compared to other “developed” nations, the USA has done far post Covid. The USA still does pretty well with resource extraction, protecting the country through resource shocks like energy. While the USA has deindustrialized, it has kept a surprisingly large number of strategic businesses including dominating IT/tech. The USA also has a relatively young workforce compared to other “developed” economies, driven by both immigration and a higher than average birthrate.
If you want to compare the USA’s GDP to the rest of the world, it is in decline but this is mainly driven by the rest of the world catching up rather than American economic collapse. This has forced the USA to try to build multilateral organizations to attract like minded nations to handle the rise of the rest of the world, which has generally worked. China has focused more on bilateral deals and no one else is really trying anything on the level of the USA.
The USA is in relative decline and has admitted it in its international dealings. However, if it can survive the political transition it is going through, it seems like it is still a pretty strong and cohesive unit able to command leadership on the international stage. It can’t dominate like it used to, but it is shifting priorities so it doesn’t have to; instead the USA helps picks the other winners.