By SPIEGEL Staff
The failed leadership of President Bush, whose departure most of his counterparts from other countries are now looking forward to more and more openly, is not solely to blame. Nor are his two risky wars: the one in Iraq, which he launched frivolously in the vain hope of converting the entire region to the American way of life, and the other in Afghanistan, in which Bush now risks the world's most powerful defense alliance, NATO, suffering its first defeat.
But it's hard to forget how this president's mentors celebrated the power to shape world affairs the United States acquired in the wake of the collapse of the Soviet Union and the end of the East-West conflict. There was talk of a "unipolar moment," of "America's moment," even of an "end of history," now that all other countries apparently had no other choice but to become smaller versions of America: liberal, democratic and buoyed by an unshakeable confidence in the free market economy.
The Bush administration wanted to cement forever this unique moment in history, in which the United States was undoubtedly the strongest power on earth. It wanted to use it to clean house in chronic crisis zones around the world, especially the Middle East. Far from relying on the classic, cumbersome and often unsuccessful tools of multilateral diplomacy, the Bush warriors were always quick to threaten military intervention -- just as quick as they were to make good on this threat.
The strategists of this immoderately self-confident administration formulated these principles in the "Bush doctrine" and claimed, for themselves and their actions, the right to "preemptive" military intervention -- with little concern for the rules of alliances or international organizations.
The superpower even claimed privileges over its allies, even offending some of its best friends during Bush's first term. Bush withdrew the American signature from a treaty to establish the International Criminal Court, he refused to ratify the Kyoto Protocol to combat climate change and he withdrew from an agreement with the Russians to limit the number of missile defense systems.
Washington sought to divide the world into good and evil -- and did so as it saw fit.
Now, in the wake of the crash on Wall Street, the debate in the UN reveals that the long-humiliated have lost their fear of the giant in world politics. Even a political dwarf like Bolivian President Evo Morales is now talking big. "There is an uprising against an economic model, a capitalistic system that is the worst enemy of humanity," Morales told the UN General Assembly.
The financial crisis has uncovered the world power's true weakness. The more the highly indebted United States has to spend to stabilize its own economic system, the more trouble it has performing its self-imposed duties as the world's policeman.
The new US president will only have been in office for a short time when a document titled "Global Trends 2025" appears on his desk. The report is being prepared by analysts at the National Intelligence Council. Its chairman, Thomas Fingar, has already released a preview, and reading it will not exactly be enjoyable for proud American. "Although the United States will remain the most important power, American dominance will be sharply reduced," says Fingar.
According to the preview of the report, the erosion of American supremacy will "accelerate in the areas of politics and economics, and possibly culture."
The century that just began is unlikely to be declared the American century again. Instead, "Asia will shape the fate of the world, with or without the United States," says Parag Khanna, a young Indian-American political scientist whose book "The Second World: Empires and Influence in the New Global Order" has attracted a great deal of attention in the United States.
There is much to be said for Khanna's assertion. Beijing is already funding a large share of the gigantic American trade deficit, while at the same time selling many consumer goods to the United States. In other words, it benefits from the US's weakness in two ways. And politically speaking, the newly self-confident Chinese will no longer allow themselves to be domineered by the West. Reacting to worldwide criticism of political oppression in Tibet, the Chinese encouraged their nationalist youth to assault Western institutions and refused to allow themselves to be lectured on human rights.
Republican Senator Chuck Hagel has acknowledged that the "world's largest debtor nation" cannot simultaneously shape the course of the world. The challenges America faces have multiplied, especially in recent times.
After the collapse of the Soviet Union and a decade of weakness, resource-rich Russia now expects to be treated as an equal to its former Cold War rival. The invasion of Georgia by Russian troops showed NATO where Moscow sees the limits of expansion of the Western military alliance. Indeed, some time ago, Russian bombers resumed patrolling the borders of the Western defense alliance.
Iran has also been unimpressed by Washington's approach to force it to terminate its uranium-enrichment process by threatening to use military force. The expansion of the nuclear facility at Natanz is progressing at a brisk pace, as expected, and Iranian President Mahmoud Ahmadinejad now considers his adversary, Bush, to be finished. "The American empire in the world is reaching the end of its road," he said in his speech to the UN General Assembly, "and its next rulers must limit their interference to their own borders."
Even before the financial crisis, there was lively debate in the United States over whether the world's largest economy could become overtaxed in the long run as a result of its international obligations and the global deployment of its armed forces. The war in Iraq costs the country $3 billion a week. And it is already clear that Bush's successor will find his powers in the White House further limited by the enormous mountain of debt he inherits.
And then there are the costs of the financial crisis -- and the recession that will inevitably follow.
Most Americans are opposed to Treasury Secretary Paulson's plan to buy the banks' bad loans for $700 billion (€483 billion). A rare coalition of the left and right reject this one-time bailout package as "un-American" and as a completely excessive act of government intervention that, in fact, rewards those responsible for the debacle: the key players in New York's financial industry.
The government and large parts of the establishment disagree. They fear that if the program fails, it could drag the American financial markets and then the global economy into the abyss.
With only five weeks to go before the presidential election, the emergency Wall Street bailout has turned into a high-stakes political drama. Last Tuesday's hearing before the US Senate, which lasted several hours and included Paulson, Federal Reserve Chairman Ben Bernanke and the chairman of the Securities and Exchange Commission (SEC), Christopher Cox, was reminiscent of a show trial, with the government and the Federal Reserve playing the role of prosecutor.
The administration struck back the next day, when Bush gave his dramatic televised address to the nation. But then the Republican Party base revolted. For many Republicans, the idea of giving away $700 billion in tax money to Wall Street banks is tantamount to the introduction of socialism on American soil.
They believe that Bush and Paulson are betraying the ideals of their party, and their fears were confirmed elsewhere on Thursday. The mood did not improve when, without further ado, the government seized one of the country's largest savings & loan institutions and sold it to JP Morgan Chase.
Many experts are also skeptical. Allan Meltzer, an advisor to former President Ronald Reagan, is critical of what he calls "intimidation tactics" designed to serve "private, not public interests."
"We are applying cold compresses to the fever patient instead of fighting the actual infection," says Christopher Mayer of Columbia University in New York. According to Mayer, the billions would be better spent reducing mortgage interest. This would reduce the number of foreclosures and attract buyers back to the market.
But as divided as Washington is, doing nothing would still be the worst alternative.
"There is no other option now than to move the plan forward," says Ed Yardeni, the former chief investment strategist at Deutsche Bank, who now heads his own research firm outside New York. "The US treasury secretary and chairman of the Federal Reserve predicted a financial Armageddon," says Yardeni. "Unless action is taken now, it'll get really ugly on the markets."
At the end of last week, investors' loss of confidence worldwide led to the credit markets becoming essentially frozen once again. This could cause the flow of money in the broader economic environment to run dry, as happened once before in the world economic crisis. This explains why Paulson, Bush and Bernanke are so nervous.
The bailout plan they unveiled at the end of last week was arrogant and incomplete. The Democrats, in particular, fought for some key changes. They want to give Congress more control over the treasury secretary and the ability to monitor his spending on an ongoing basis. Instead of approving $700 billion in one fell swoop, the Democrats want the funds to be disbursed in portions. Banks wishing to take advantage of the government bailout would also have to impose limits on executive compensation.
Finally, the Democrats want taxpayers to get something in return for their sacrifice: The government would buy the financial institutions' toxic mortgage securities at a preferred price. In return, it would receive bank shares that it could later sell, if and when prices recovered.
Overall, the hope was that this would reestablish relatively normal market conditions. Banks would be able to unload their junk securities for a clear price, their balance sheets would no longer be adversely affected by virtually worthless mortgage-backed securities, and transparency and confidence would be restored.
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