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The End of American Exceptionalism

Published 10/07/08 Dustin Ensinger - Print Article
E-mail - editor@economyincisis.org

The age of American exceptionalism may officially be over. Since the end of WWII, the United States and Wall Street have been the financial capitals of the world. After the current financial crisis, this long accepted fact may no longer be true.

The U.S. is rapidly being forced from the world stage by thriving Asian nations like China and India and oil-rich Middle Eastern nations with extremely large sovereign wealth funds - large enough to finance a $700 billion bailout numerous times over.

German Finance Minister Peer Steinbrueck has said that after the smoke clears from the current financial crisis we are certain to see "the end of America as a financial superpower."

Last week Ecuador’s Rafael Correa crowed, "The U.S. economic model is terminally ill."

The financial landscape will never look the same again.

A multi-polar world is developing, with the rise of economic powers in Asia competing with the U.S. for capital investments. The unfettered free-market days of the Ronald Reagan’s and Margaret Thatcher’s of the world who advocated easy credit, high risk deals and big paydays are probably over.

Now we can expect more regulation, more government intervention and thus less capital investment. Companies have already been looking to Asia for cheap labor and less regulation for years. That trend will likely increase as companies will have Uncle Sam looking over their shoulders in the future.

America’s loss of power in the financial sector is eerily reminiscent of its loss of manufacturing prowess in the 1970s when the U.S. made nearly half of the world’s goods. Fast forward 30 years and America’s manufacturing base is made up of just 13 million workers, or 10 percent of the entire workforce.

The financial crisis is showing America’s true economic weaknesses. Companies and nations are no longer looking to Wall Street for financing. Instead they are avoiding the Wall Street mess like it is the plague. As this trend continues, it only reaffirms the fact that America’s days as the world’s remaining superpower are over.

"Unrestrained capitalism like the kind we're experiencing right now with all its greed will in the end devour itself," Steinbrueck said.

We may be witnessing exactly that.

Source The Wall Street Journal:

Soon enough, America's financial crisis will wind down -- maybe in a month, maybe in a year. Yet regardless of when, this crisis marks the beginning of a new era for the U.S. For more than six decades, from the end of World War II in 1945 until now, the U.S. was the hub of global capital and capitalism. In the years to come, it will remain a vital center, but not the center.

…

Even as that was happening, however, American financial institutions still wore the mantle of global leadership. As China, the Gulf region, India, Brazil and other parts of the world have increased in affluence, they relied on the expertise, acumen and advice of Wall Street. Go to any region of the world and you will find central banks and investment banks staffed by people educated at U.S. business schools and graced with resumes that include time at the formerly premier institutions of Wall Street. Few major deals were brokered without involvement from a U.S. bank or access to Wall Street financing. That is now at an end.

Click Here For Solutions To America's Economic Problems

Front Page Photo by shadowmancer76 - Flickr © Some rights reserved

Click here to contact your Representative in Congress.

Unless the above article is already copyrighted, this article is licensed under a Creative Commons Attribution-No Derivative Works 3.0 United States License, EIC grants permission to use this article in whole or in part provided attribution is given, preferably in the form of a link back to EconomyInCrisis.org.

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Article Comments From Readers

guest says "America" on 10/07/08
you have your choice in 2008 between a Facist and a Communist... I'll take the communist over the facist most of the time, and this is one of them, but seriously what ever happened to having competency in government?

guest says "END OF AMERICA" on 10/07/08
I WANT TO THANK THE BUSH ADMINISTRATION, REPUBLICAN PARTY, THE DEMOCRATS, NANCY PELOSI AND THE CEOS OF THE WALL STREET CLAN, THEY DESTROYED MY COUNTRY, BANKRUPTED MY COUNTRY-SOLD IT OUT TO THE FOREIGN COUNTRIES, THEN A $700 BILLION DOLLAR BAILOUT, NOT TO HELP THE CITZENS OF AMERICA BUT THERE OWN GREED, BUSH, PAULSON , BARNEY FRANK(THAT FAT TOAD) BAILED OUT ALL OF THE BANKERS AND CEOS OF THSE COMPANIES, DONT BELIEVE ME, JUST LOOK AT THAT DEBACLE WHEN THEY QUESTIONED THE CEO OF LEAMAN, A F----ING JOKE, ITS JUST MAKEUP TO FOOL THE CITIZENS,NOW WE HAVE AN OLD MAN,AN INEPT 1 YEAR SENATOR RUNNING FOR PRESIDENT, AND THE CEOS HIDING THER MONEY OFSHORE-THANK YOU ALL FOR DESTROYING MY COUNTRY-GOD HELP US