The Real Cost Of The 2012 Election

On November 27, the Asian Times posted an article entitled, “Post-US world born in Phnom Penh.” The article reports something not widely reported in the American media:

President Barack Obama attended the summit to sell a US-based Trans-Pacific Partnership excluding China. He didn’t. The American led-partnership became a party to which no-one came.

Instead, the Association of Southeast Asian Nations, plus China, India, Japan, South Korea, Australia and New Zealand, will form a club and leave out the United States. As 3 billion Asians become prosperous, interest fades in the prospective contribution of 300 million Americans – especially when those Americans decline to take risks on new technologies. America’s great economic strength, namely its capacity to innovate, exists mainly in memory four years after the 2008 economic crisis.

The article includes a number of charts detailing the decline of American economic influence. The first chart explains what is happening:

Asian, European and US exports

It is hard to fathom just what President Obama had in mind when he arrived in Asia bearing a Trans-Pacific Partnership designed to keep China out. What does the United States have to offer Asians?

  • It is borrowing $600 billion a year from the rest of the world to finance a $1.2 trillion government debt, most prominently from Japan (China has been a net seller of Treasury securities during the past year).
  • It is a taker of capital rather than a provider of capital.
  • It is a major import market but rapidly diminishing in relative importance as intra-Asian trade expands far more rapidly than trade with the United States.
  • And America’s strength as an innovator and incubator of entrepreneurs has diminished drastically since the 2008 crisis, no thanks to the Obama administration, which imposed a steep task on start-up businesses in the form of its healthcare program. Washington might want to pivot towards Asia. At Phnom Penh, though, Asian leaders in effect invited Obama to pivot the full 360 degrees and go home.

The arrogance of the Obama Administration is part of the problem. After over-regulating small business, driving up the national debt, and increasing borrowing from China, what did President Obama think he had to offer? The results of President Obama’s Asian trip are proof that America’s influence in the world is waning (as charged by Governor Romney during the Presidential campaign). The question becomes, “Is this important; and if it is, what are we going to do about it?”

 

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