The United States is typically a very self-absorbed nation. As the largest economy in the world, and separated by two oceans, US based news and the opinions it shapes have always been centered on domestic concerns projected out into the world. This has only been exacerbated by the a pathologically self-absorbed president.
Because of this problem, the simple fact that the world is fleeing away has escaped many Americans. What has been a growing practical reality as the US share of the world economy slips is becoming a necessity thanks to severe foreign policy mistakes, all of which cater to a domestic audience. “All politics is local” remains true, even though it clearly should not be.
The two biggest foreign policy areas, a trade war with China and sanctions against Iran, appear to be two different situations with the US at the center of both. They are not, and increasingly will become less and less about the US. This simple fact is going right past us, too – making our policies even more ridiculous and harmful to our own interests.
As this year develops, the economy is stronger than it has been in a long time. Yet the process of spreading out the wealth and creating strong growth has yet to come together. While there is little doubt that our image of the economy is changing, some important things have not. The most important aspect of our economy, that it works for everyone with some degree of equity, is not changing much. That will keep our politics in turmoil for some time to come.
The reason for this is simple: the US Dollar is incredibly strong and is likely to remain so for years. This means that manufacturing, the life blood of the heartland, will not return soon. The anger over this, blaming China and Mexico and everything except the automation and accumulation of wealth which really drives it, will certainly continue.
Even if most people don’t believe it, the economy is certainly improving for some people. The Federal deficit has declined to $415B, or 3% of Gross Domestic Product (GDP), from a high of over 10% as recently as 2009. This has been fueled by a large increase in tax revenues combined with a drop in spending on unemployment insurance, mortgage assistance, and so on. Our trade deficit with other nations is also dropping rapidly due to lower imports of fuel, and now stands at less than $400B.
That’s good news all around. The only problem is that the US economy is borrowing money or sending it overseas at anywhere near the rate that the world needs it as trade expands. That is putting upward pressure on the US Dollar, meaning that while imports are likely to become cheaper there is little hope that US manufacturing is going to get a break anytime soon – despite remaining one of the big casualties of the depression so far.
Imagine a single currency, all around the world. No more converting between Dollars and Euros and Pounds, the money in your wallet is your ticket to ride anywhere.
Sound like a fantasy? Throughout history it’s been more or less the standard. The coins from one era might come from Rome or Madrid or London or Beijing, but one accepted unit of exchange was the norm until very recently. In many ways, the standard now comes from twelve Federal Reserve banks in paper form, printed with green ink.
But we’re a global society now, with total worldwide trade taking up nearly $8T of the global product of $52T. Is it time for a new global currency that isn’t subject to the needs and politics of one nation? More and more, the answer is “yes”. But getting there, as with anything international, is the hard part.