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This Week: The Declining U.S. Empire

Greetings,

I’ve been writing a lot about Minnesota since my return to publishing last month.  The first essay in this issue has a little more on Minnesota, but the focus of the rest of #606 really is on the place of the United States in the world at this moment.

The U.S. intellectual tradition of looking at things individualistically gets us screwed up in many ways.  One of the ways is to get us to focus on news of the current president’s statements and actions in hopes of understanding what’s going on in the world.  A bad idea.  As I heard someone say recently, “Following the daily news to find out what’s going on in the world is like trying to tell what time it is by watching only the second hand on a clock.”  Back up.  Slow down.  Understand.

With that in mind, I focus this week on longer-term historical trends—diplomatic, economic, informational, and military—to illustrate just how much of what is going on in the world has little to do with the current president.  Or any president, for that matter.  The U.S. Empire, or what’s left of it, is declining.  That’s a tough idea to grasp, so that’s why this issue of Nygaard Notes is longer than usual.

Towards a post-imperial future,

Nygaard

“Quote” of the Week: “Constant Heavy Fighting and Airstrikes and Drones.

Back in 2007 I referred to Afghanistan as The Forgotten War.  Well, it’s still forgotten (in the U.S.), and it’s still a war.  Readers conscientious enough to read to the final two paragraphs in a small story on page 6 of the April 10th NY Times were rewarded with the following hint of the scale of the ongoing war:

“Malik Kamin, a tribal elder in Shadal Bazaar, said ‘We didn’t see American soldiers in Achin and Shadal Bazaar before, but 15 days ago when the anti-[Islamic State] operation started Americans also came here and they are helping Afghan forces. There is constant heavy fighting and airstrikes and drones.”

“In a news conference last week, [Capt. Bill Salvin, a spokesman for the American forces in Afghanistan] said the goal of the United States counterterrorism mission in Afghanistan for 2017 was to eliminate the remaining Islamic State-affiliated pockets. To that end, the mission had carried out an intense campaign of airstrikes against the Islamic State affiliates, as well as the remnants of Al Qaeda, with about 560 strikes in the first months of the year so far, more than a hundred of those since the beginning of April.”

Unbelievable carnage, in other words.  Yet the headline read, “U.S. Soldier Killed in Mission Against ISIS in Afghanistan.”

Forgotten or not, the Times says to expect more carnage, reporting that “The United States commander in Afghanistan, Gen. John W. Nicholson, has expressed the need for thousands more American soldiers ahead of what is expected to be a tough fighting season.”

“Enhance Minnesota” Agenda Presented

In the last Nygaard Notes I wrote about the newly-formed People of Color and Indigenous Caucus in the Minnesota State House of Representatives, and I promised to say a little more about the caucus this week.

The formation of the POCI (say “Posse”) Caucus was announced at an April 5th press conference, after which the local CBS News affiliate reported that “Democrats at the State Capitol are forming a minority caucus to push for issues that are important to people of color.”  Well, that’s true, I suppose, but such a framing paints people of color and indigenous as some kind of “special interest” faction whose interests are separate from the overall interests of the state.  That’s not how solidarity works.

Minnesota’s racial makeup may be changing, but the leadership is still mostly white.  And, being a white guy myself, I’m sorry to say that many of us seem to have difficulty grasping the idea that racism is a big problem for all of us, not just for the targeted populations.

At the press conference the POCI Caucus unveiled what they are calling the “Enhance Minnesota Legislative Package.”  (Note that it’s “Enhance Minnesota,” not “Enhance Only Some People in Minnesota.”) The package is extensive, and highlights more than 40 specific bills, grouping them into four categories: “Education Access, Healthy Families, Economic Opportunities, and Civil Rights for All.”

Coincidentally, the adjournment date for the Minnesota Legislature this year is May 22, almost exactly 40 days from the release of the 40 legislative initiatives highlighted by the POCI Caucus.  That’s just an odd coincidence, of course, but it underlines the idea that local media could report on one piece of POCI-endorsed legislation every day for the rest of the session, if such reporting were deemed important.  It’s not, so I’ll just summarize here, very briefly, some of the initiatives on the Enhance Minnesota list.

Under “Education Access” there is a bill creating a pilot program for “Underrepresented and disadvantaged girls … to encourage and support exploring and pursuing STEM careers.”  That’s Science, Technology, Engineering and Math. (If you don’t see that this is important, go see the movie “Hidden Figures.”)  Another bill seeks to “double the number of teachers of color and teachers who are American Indian” in Minnesota.  Other bills aim to help low-income students get into college, reduce the racism in pupil discipline in the schools, and more.

Under “Healthy Families” there are bills to support child care, to prevent homelessness, to support culturally competent mental health care, to provide funding for “Community identity and cultural heritage” work, to support “Women-run cooperative child care businesses in low-income urban areas,” to provide funding for opioid overdose prevention in American Indian communities; and more.

The “Economic Opportunities” section has a bill that funds “Business training courses targeted at women of color,” and one that establishes “Urban agriculture development pilot grant programs.  Another bill funds a “Businesses run by East African women loan funding” program.  In this category we also find a comprehensive bill, the summary of which reads, “Minimum wage phased-in increase provided, low-income workers enabled to meet basic needs, working family credit increased, low-income worker increased child care assistance and reimbursement rates provided, MFIP [welfare] grants increased, [and] tax loophole for high-income individuals with income exempt from Social Security taxes closed.”

The section “Civil Rights for All” includes initiatives to restore some felon voting rights, and training in crisis response, conflict management, and cultural diversity for the state’s police officers.  House bill 1576 would make Minnesota a “sanctuary state.”  The bill, as described by the news site Buzzfeed, “would restrict law enforcement officials from arresting or detaining an individual to investigate a suspected immigration violation, or to inquire about immigration or citizenship status. The bill would also, among many other provisions combating immigration-related executive orders, stop local law enforcement from essentially becoming deputized by federal agencies to perform immigration-related activities.”

I have intentionally refrained from commenting on two House bills that are among the most exciting proposals that I’ve come across lately.  Namely, HF 142 and HF 1813.  (Yes, I know, you don’t know what those bills are all about.  You’ll have to read the next Nygaard Notes to find out!)

Minnesota now has a Republican majority in both houses of the legislature, so most of the legislation above will not become law this session.  But that’s why it’s important to notice and support the Enhance Minnesota agenda: The initiatives highlighted there are sparks of light at a time when many on the Left can see only darkness.  In announcing the birth of the People of Color and Indigenous Caucus, charter member Representative Ilhan Omar spoke clearly: “We ask you to join us and help us amplify our voice.”

If you live in Minnesota—or even if you don’t—you may find it worth your while to spend 30 minutes watching the POCI Caucus press conference.  It’ll brighten your day.  Find it on YouTube!

Propaganda, then Anti-Propaganda, in the Times

For an illustration of what a hard-working reporter CAN do, even in the corporate context, consider a recent example from the New York Times.  We’ll look at two articles, both concerning the United States’ dropping of the largest non-nuclear bomb in history on the nation of Afghanistan on April 13th.

Called the MOAB—you no doubt heard it referred to as the “Mother Of All Bombs—the official account of the bombing was widely reported.  In the days after the bombing, many headlines were seen that echoed these samples: “’Mother of All Bombs’ Killed Dozens of Militants, Afghan Officials Say” and “36 ISIS Fighters Killed” and “Official: Massive U.S. Bomb Death Toll Rises to 94″ and “No Civilian Deaths Reported”

The news website Business Insider reported on April 20, “A week after US forces dropped the [MOAB] on a remote part of Afghanistan, American officials have released little information about the strike or its aftermath, and security forces in the area continue to block access to the site.”  Access was blocked for more than a week after the bombing.  One had to go to an Indian news source, ABP Live, to see a headline like this: “MOAB strike: ‘ISIS denies suffering casualties from US bomb in Afghanistan’”.  Six days after the bombing the Iranian media quoted a resident of the area, who said “No one can go there, they have completely blocked the area. I don’t know if my house is destroyed. They have not even shown any dead bodies to anyone.”

Who knows if the ISIS denial is true, or if the many “officials” quoted in the media are telling the truth with their accounts of scores of dead with no civilians among them?  Access to the site is now possible, but I’ve yet to see a single U.S. report with a byline from Nangarhar Province, where the bomb was dropped.  It’s yesterday’s news now, so we may never know what happened.

One interesting side note on the reporting—or, perhaps, speculating—on the bombing was the widely-reported claim that “The show of force was a signal to U.S. enemies including Syria, North Korea and Iran that the White House is prepared to take actions from which previous administrations refrained.”  Many U.S. news sources offered this type of “analysis.”  Two days after the bombing, on April 15th, the nation’s Newspaper of Record, the New York Times, chimed in.  Under the headline “A Giant Bomb Carries Even Bigger Messages,” the Times told readers, “To potential adversaries like Syria and North Korea, the bombing could signal deterrence.”

Let’s shower boos on the Times for that story.  But then, let’s shower kudos on that same organization for a story that appeared one week later.  That April 22nd story had the headline “Do U.S. Strikes Send ‘Message’ to Rivals? There’s No Evidence.”  Reporter Max Fisher did his homework, writing, “The notion that military action in one part of the world will deter adversaries in all others, long common in stump speeches and on cable news chatter [he didn’t mention his own newspaper], has at times profoundly influenced American foreign policy.  There is only one problem: Repeated investigation has found that this notion is baseless.”

Here are a few excerpts from the excellent article:

“Jonathan Mercer, a University of Washington political scientist who studies so-called signaling in foreign policy, said this line of reasoning ‘drives me crazy.’  His entire field of study, he added, had never found evidence that would support the administration’s claims.”

“Jennifer Lind, a Dartmouth College political scientist, said those claims relied on a set of assumptions about resolve and credibility that, though widely held in Washington, had been extensively debunked.”

“‘If someone says, “Because we dropped the MOAB, North Korea will think again before they mess with us,” this is just that person’s intuition,’ she said, referring to the bomb used in Afghanistan. She added, ‘There’s no theory or evidence there.’”

The April 15th article was authored by no fewer than six Times reporters.  Too bad Max Fisher wasn’t one of them.  The laudable April 22nd piece was not actually an article, but a column called The Interpreter.  I’m often quite unhappy with The Interpreter—in fact, I harshly criticized it last September.  But they got this one right.

Final note: I don’t think it’s random chance that the first, propaganda-laden, article appeared a mere two days after the bombing.  Sources who parrot the official “line” are easy to find and ready to talk.  The column by Fisher appeared a week later, likely due to the fact that tracking down and interviewing non-official sources takes a while.  Come to think of it, actually stepping outside of the propaganda system and thinking about what one is being bombarded with takes a little time, as well.  Another reminder to beware of “breaking news.”  Take some time to reflect.  Like the Times didn’t.  Then did.

Declining U.S. Diplomatic Power

In a 2014 essay, foreign service officer Paul Kreutzer says that “diplomacy” is defined by the Department of State as “the art and practice of conducting negotiations and maintaining relations between nations; skill in handling affairs without arousing animosity.”  The United States has long taken actions on the world stage that seek to set the United States apart from the other countries of the world, often arousing animosity in the process and weakening the diplomatic power of a once-hegemonic nation.  I offer here a few bits of evidence to support the claim that the diplomatic power of the U.S. has been weakening for a while, and will likely continue to do so.

It was 17 years ago, in Nygaard Notes #81, that I wrote about the global effort to establish an International Criminal Court with jurisdiction over such crimes as genocide, war crimes, and crimes against humanity.  The United States sought to be “exempt” from the Court’s rulings, which left the United States “isolated among the nations of the world,” in the words of the New York Times.  The U.S. remains outside of the ICC system.

In 2006 I reported on the formation by the United Nations of a new Human Rights Council.  The vote was overwhelming, with 170 nations in favor, four opposed, and three abstaining.  The opposition was led by the United States, generating another headline: “UN Human Rights Vote Leaves U.S. Isolated.” One of the Obama Administration’s final acts was to succeed in getting the U.S. elected to another three-year term on the Council, and there isn’t much the Trump administration can do about it, it seems.

Turning to U.S. relations with the rest of the Western Hemisphere, in 2013 I wrote about a range of initiatives that point to the declining diplomatic (and economic) power of the U.S., right here in our own hemisphere.  Started in 2004, ALBA, the Bolivarian Alliance for the Peoples of Our America, was a part of the struggle “against the forces behind the Free Trade Area of the Americas,  including the White House, the [International Monetary Fund], the Washington Consensus, and the neoliberal rationale behind a complex institutional, financial, and policy structural network.”

2011 saw the birth of CELAC, the Community of Latin American and Caribbean States, which was conceived as an alternative to the Organization of American States (OAS), which was organized largely by Washington in 1948.  Raúl Zibechi, writing for Mexico’s center-left La Jornada newspaper said, “The creation of the Community of Latin American and Caribbean States is part of a global and continental shift, characterised by the decline of U.S. hegemony and the rise of a group of regional blocs that form part of the new global balance.”

Far from engaging with the reality of reduced diplomatic power, the Trump administration seems to want to accelerate the decline.  The April 11th Washington Post reported on the “staggering number of top jobs at the State Department [that] remain unfilled, which has created a power vacuum…”  The Reuters News Service reported on March 16th, that “The White House is proposing a combined $25.6 billion budget for the State Department and USAID, a 28 percent reduction from current spending…”  Added Reuters, “‘This is a ‘hard power’ budget. It is not a ‘soft power’ budget,’ Mick Mulvaney, Trump’s budget director, told reporters, referring to the president’s desire to prioritize military power over the influence that can flow from development aid.”

But the declining emphasis on “soft power” is nothing new.  The late ambassador Robert J. Ryan Sr., in an editorial column, wrote, “Diplomacy, our nation’s first line of defense in this post-Cold War world, is dangerously eroding because of both the lack of public interest in and the low priority level given by the Congress and the administration to foreign affairs.”  That was written in 1996.

When the United States was the undisputed power in the world (roughly from the end of World War II until the early 1970s), most of the world went along with the U.S. because everyone loves a winner.  The past forty years has seen a steady decline in U.S. diplomatic power, a decline that won’t be easily reversed, by Trump or anyone else.

The increasing weakness of the U.S. in the diplomatic sphere is not unrelated to the development and maintenance of the nation’s huge military capacity.  After all, if you can’t join them, beat them.  Right?  Well, not exactly, as the next essay will show.

Declining U.S. Military Power (?!)

It is not uncommon to hear people talk about declining U.S. military power.  The Commander-in-Chief himself refers to “the depleted military,” and many seem to agree with him.  Mostly they chalk it up to a lack of resources, which sounds rather silly, really, since U.S. military expenditures are roughly the size of the next seven largest military budgets around the world, combined.

Nevertheless, the founder of the “conservative” Heritage Foundation says it is, in fact, a matter of money: “The main enemy facing our military today isn’t a foreign army. It’s a domestic tool known as the Budget Control Act.”  A perceived lack of resources leads the Investor’s Business Daily to scream that “America’s Weakening Military Strength Is Terrifying.”  On the left, Michael Klare, writing in The Nation magazine, says that the U.S. has “an exhausted military and a depleted treasury.”

The U.S. military is much weaker than it appears, but that’s not due to a lack of resources nor to exhaustion.  The weakness comes from a reluctance on the part of the U.S. population to sacrifice their lives in endless wars.  And that “problem” (for U.S. warmakers) started in Vietnam.

Popular resistance to the American war in Vietnam was fueled by two things: One was the endless images of the ravages of war that were beamed back via television to living rooms here at home.  Media reporting of the realities of war had a powerful effect in building resistance to the war.  Vietnam was the first truly televised war, and viewers didn’t like what they saw.

The other thing that galvanized opposition to the Vietnam war was personal experience.  Military service was not voluntary, and the military draft ensured that many, many people knew someone who died in the war, or who loved someone who died in the war.  Many asked, “What are we fighting for?”, and good answers were hard to come by.

These two factors gave rise to what might be called “The REAL Vietnam Syndrome,” which is behind the ongoing efforts on the part of U.S. policymakers to conduct war with no visible killing.  That is,  no visible killing of USAmericans.  That’s why our leaders often promise that there will be no “boots on the ground” in Syria, Yemen, Somalia, or anywhere else where the U.S. is conducting or supporting military action.  Just plenty of bombs, drones, and airpower.  “Remote control war,” to the degree possible.

The Vietnam Syndrome also dictates that, if the U.S. is forced to commit land troops to a conflict, no one at home should be allowed to witness the ensuing suffering. This has been wildly successful.  The New York Times, in a 2008 article headlined “4,000 U.S. Deaths, and a Handful of Images,” reported that “If the conflict in Vietnam was notable for open access given to journalists . . . the Iraq war may mark an opposite extreme: after five years and more than 4,000 American combat deaths, searches and interviews turned up fewer than a half-dozen graphic photographs of dead American soldiers.”  That’s 99.9 percent invisibility, a remarkable success rate.  (Iraqi deaths, far more numerous, were not even mentioned.)

The Navy SEAL raid in Yemen at the end of this past January—the first military raid directly ordered by President Trump—was labeled a “disaster” due to the death of a single U.S. Navy Seal and the wounding of three other USAmericans.  The two dozen Yemeni civilians who were killed were mentioned only in passing, and will no doubt remain forever unnamed in the U.S. media.

The desire to avoid U.S. deaths and, equally importantly, to avoid the witnessing of U.S. deaths, in military actions has resulted in a change of strategy and of tactics.  The new strategy, in place for many years, has been to deploy military force multilaterally rather than unilaterally.  So we have seen military actions by a “coalition” led by the United States.  Recall President Bush’s “Coalition of the Willing” from 2003.  Recall also that the foreign forces in Afghanistan today, while mostly U.S. forces, are officially “NATO” forces.  The idea is to keep U.S. forces, as much as possible, off of the front lines.

The awareness on the part of U.S. leaders of the lack of political support for military actions in far-off places has led to the rise of what has been called “The New American Way of War.”  Which can be defined as “An international military alliance that can attack rapidly anywhere in the world, dominated by the United States, using U.S. weapons and technology, but with no risk to U.S. life.”

This “New American Way of War” is what dictates that the U.S. get other nations to do the actual fighting, and it comes with a tradeoff: The U.S. gives up being the absolute master in exchange for strong alliances with countries willing to sacrifice their young men and women.  Trump doesn’t seem to like alliances, but neither does he seem to understand the reality of the U.S. population’s unwillingness to sacrifice for a world order that doesn’t serve them.  Or, maybe he does understand it.  We’ll see what happens.

When Military Strength Becomes Weakness

Writing in the Harvard International Review (the Spring 2007 issue), global systems analyst Immanuel Wallerstein discussed U.S. military decline in the context of the U.S. invasion of Iraq.  The following lengthy excerpt very neatly explains how domestic resistance can—and has—put the brakes on some of the worst excesses of the U.S. war machine.

Following decades of gradual decline, writes Wallerstein, “The United States’ economic, political, and ideological position had already become tenuous by 2001. The only advantage the United States seemed to retain was in its absolutely enormous military capability, and it was on this power that Vice President Dick Cheney, former Secretary of Defense Donald Rumsfeld, and the neoconservative policymakers were relying. But they made two fundamental mistakes.

“The first was failing to realize that air power and special forces are sufficient to make the armed forces of even strong powers retreat, but they are not able to bring wars to a conclusive end. For that, land armies are necessary—and against popular resistance, very large land armies. But the United States does not and will not have a significantly large land army primarily due to political reasons [as this issue of Nygaard Notes has been discussing]. The US public is ready to cheer on military victories, but they are not ready to sacrifice the lives of their children. Invasions like those of Iraq are thus destined to fail.

“And that leads to the second mistake of the neoconservatives. Military power is feared as long as it is successful. But anything less than overwhelming victory reduces the fear of others, and therefore the effectiveness of expensive and advanced military hardware as an intimidating factor in world politics.”

And here we have not only Iraq to consider, but also Afghanistan and, should the Trump administration fail to understand the limits of military power spelled out here, perhaps Iran, North Korea, Somalia, Yemen, or any of a number of other potential targets.

Seen in this light, Trump’s plans to beef up the U.S. military may simply increase the injuries that come with shooting oneself in the foot.

Declining U.S. Media, Growing Propaganda

One of the elements of power wielded by a state (national government) is control over information, or control over opinion.  Unfortunately, as soon as I say either of those phrases, many people automatically jump to thinking about straightforward “propaganda.”  This type of thinking runs throughout the information system these days.  For example, the Washington Post recently ran a commentary headlined, “How the American Government Is Trying to Control What You Think,” the authors of which were all worked up about “examples of the executive branch using our tax dollars to shape our opinions.” [emphasis in original]

I’m sure there are all sorts of efforts emanating from the federal bureaucracy aimed at shaping our opinions.  That’s always been the case, and it’s especially needed in a formal democracy, like the United States, where the leaders have to occasionally get elected or, more importantly, get the consent of the population for desired actions.  It can be thought of as a battle for the hearts and minds of the people.  It’s an ongoing battle.

For a hundred years or more, the U.S. government has received enormous help from the corporate press in its efforts to shape opinion.  I say “a hundred years” because it was roughly a century ago that the daily press in the United States consolidated and homogenized its reporting, beginning to officially paint itself as “objective.”  Among the many problems with the media’s pretensions to “objectivity” has been what has developed into what I call a Slavish Reliance on Official Sources, or SROS.  More on that in a moment.

Even with media’s limitations, it is still true that an independent, well-resourced media can be a counterweight to the efforts of political leaders to shape opinion about—even understanding of—what needs attention.

In this context I’m interested in the void created by the shrinking capacity of our media system to monitor government actions.  As the Pew Research Center’s State of the News Media 2016 reminds us, the years-long decline in revenue—and thus, capacity—that has been plaguing the corporate media continues to drain both money and newsroom staff.  It’s serious.  As Pew puts it, “newsroom staffing fell by 10% in 2014, the last year for which data were available. Coming amid a wave of consolidation, this accelerating decline suggests the industry may be past its point of no return.”

And what does that have to do with the U.S. government’s control of information?  Two things.  First of all, the resources devoted to official government public relations are enormous.  It’s in the range of $1 billion a year, according to the latest (last September) report from the Government Accountability Office, an amount which “does not capture the full scope of these activities,” for a variety of reasons.  The fuzziness comes clear with a glance at the State Department’s “2016 Comprehensive Annual Report on Public Diplomacy and International Broadcasting,” which refers to “the combined $1.849 billion core public diplomacy and international U.S. international media budgets.”  That’s almost twice the GAO number.  In any case, they’re both huge numbers.  And the GAO tells us that more than half a billion dollars (of whatever the total may be) is allotted to the Pentagon, and is spent on “more traditional public relations media such as television and radio,” but makes increasing use of “e-mail, websites, blogs, text messaging, and social media such as Facebook.”

Now take into account a comment from an earlier (2013) State of the News Media study, which noted that “shrinking reporting power” has resulted in “a news industry that is more undermanned and unprepared to uncover stories, dig deep into emerging ones or to question information put into its hands.”  The result is that the institutions that have the resources—namely, the federal government and the corporate sector—are left to “put information into the hands” of the public, by way of the “undermanned and unprepared” media.  The corporate media, due to its structure and reliance on advertising, has always been guilty, as I mentioned, of a Slavish Reliance on Official Sources, or SROS.  But the media is not monolithic, and there have always been good reporters snooping around behind the scenes.  (For an example, read about Max Fisher elsewhere in this issue of the Notes.)  Still, as budgets tighten, less and less of this goes on, as the media is forced to fall back on the inexpensive SROS.

All of this results in an increase in the government’s ability to “spin” the news of what they are doing, but more importantly it allows government—and it’s corporate backers/allies—to set the news agenda.  So we constantly hear about the Trump administration “quietly” doing, or not doing, some very important things.  April 4th NPR headline: “Trump Administration Quietly Starts Review Of China’s Trade Status.”  April 14th Salon.com: “The Trump administration is quietly rolling back Obama-era gun regulations.”  ProPublica April 21: “Remember Those Temporary Officials Trump Quietly Installed? Some Are Now Permanent Employees.”

Good for NPR, Salon.com, and ProPublica for making these actions a little less “quiet.”  But when we consider that the federal government’s budget is in the range of four TRILLION dollars, one can only imagine how many more very important things are happening so “quietly” that we never hear about them.  Bringing such things to light is why an independent media is so important.

Declining U.S. Economic Power

Following World War II, the United States emerged as the leader of a global economic order that served its interests.  As U.S. Treasury Secretary Jacob J. Lew said last year in an article in the Foreign Affairs, “The international financial institutions amplify U.S. influence on the global stage.”  That used to be true, but is now more like wishful thinking.

What we’ve seen in recent years is the creation of all sorts of international financial organizations that are shaping the global economic order in ways that do not always “amplify U.S. influence.”  I’ve written about the China Development Bank, the Brazilian Development Bank (which is now bigger than the World Bank), the Asian Infrastructure Investment Bank, proposed by China, and the New Development Bank set up by the so-called BRICS countries: Brazil, Russia, India, China and South Africa.  We have to mention here the Asian Infrastructure Investment Bank (AIIB).  Started by 57 countries in 2015, led by China, the AIIB has been called “the first international financial institution of the 21st century.”

All of these initiatives aim to make it possible for nations in various regions of the world to get access to needed capital without having to please the U.S. government or, more to the point, U.S. bankers and bond holders.

Another important development serving to dilute U.S. economic power is a shift away from the dominance of the U.S. dollar in international trade, “as China, Russia, Brazil and others move to denominate more of their commerce in other currencies.”

Global bond ratings services, long dominated by U.S. ratings firms, face ever-growing competition.  I mentioned back in 2015 the plan by China and Russia to set up a new credit-rating firm called the Universal Credit Rating Group.  Now there’s a new development: This past October the South African Press reported on plans by the BRICS countries to “fast-track the setting up of their own credit-rating agency to better cater to developing economies, rivaling existing ones based in Western countries.”

China officially became the world’s largest economy in 2014 (by one measure).  Not only that, but China is leading the way in creating what they are calling the “New Silk Road,” which Forbes Magazine described last month as “the emerging network of infrastructure mega-projects, enhanced transportation routes, and economic and energy corridors that are designed to increase connectivity between countries from China to Europe.”  There’s a big New Silk Road summit in Beijing next month, which both Japan and Germany have agreed to attend, no doubt displeasing U.S. leaders.  India’s Economic Times quotes a senior Asian diplomat saying “The uncertainty over Trump and his ‘America First’ is leading countries to realise they need to get on good terms with China.”

All of the above—much of which I noted back in NN #569—points to a decline of U.S. global economic dominance.  But what is declining is merely the democracy-based part of the United States.  That is, the government part, the part that is supposedly of the people, by the people, and for the people.  But there is another part of the United States that is not seeing its dominance decline, and I’ll discuss that in the next Nygaard Notes.

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