Summary
The US emerged from WWII as the world’s leading economic and military power. Since that time US hegemony has been predicated on: 1) unrivaled military strength, 2) control of world’s energy reserves and 3) primacy of the US dollar as the world’s reserve currency. All of the pillars supporting US global dominance are now being threatened by continuing US economic decline coupled with ongoing economic development of China and other Asian countries, who are increasingly using currencies other than the US dollar, for international trade. US economic decline is fueling global instability and increasing the possibility of conflicts erupting between global powers. Thus the threat of nuclear war hangs over the world.
How did we get here?
The US emerged from WWII, with its manufacturing base intact and was the world’s dominant economic power. This began to change in the mid-1970s, as US corporate profits began to stagnate/decline, a consequence of increasing competition from rebuilt economies in Europe- primarily Germany (Marshall Plan), Japan and Korea (US wars in Korea and Vietnam) and later China (1). To deal with these structural economic problems confronting US capitalism, the directors of economic policy in the government and large corporations faced a decision that would play a major role in shaping global geopolitics for the next 5 decades. They could make large investments in the domestic economy, developing state of the art manufacturing facilities and equipment that would enable US corporations to effectively compete with those in newly emerging economies, or abandon manufacturing and change the structure of the US economy. As we now know, policy makers chose the latter route. This policy was based on economic attacks on poor people and labor, financial deregulation, increased spending on the military and war and rampant financial speculation.
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