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Further Thoughts on the Life Expectancy of U.S. Hegemony In 2008, many important economic events occurred in rapid succession in the United States. There was a subprime mortgage crisis. Fannie Mae and Freddie Mac, the country’s two largest mortgage companies, were faced with serious financial difficulties. The government had no choice but to take control of them. On September 15, the country’s fourth-largest investment bank, Lehman Brothers, with capital holdings of more than $640 billion, declared bankruptcy. Another investment bank, Merrill Lynch, was taken over by Bank of America. AIG, the country’s largest insurance company, faced a crisis, and the U.S. government declared that it would recapitalize it. Then Morgan Stanley and Goldman Sachs abandoned investment bank status and became bank holding companies. Wall Street confronted a serious economic crisis. In order to cope with it, on September 20, the government announced that it would invest as much as $700 billion in a rescue plan to help the U.S. economy weather the worst times since the world economic crisis of 1929. It also turned to the world community to request assistance, hoping that other economically powerful members of the G7 would take measures to save the market. In sum, this crisis is much more serious than the incidents several years ago involving Enron, Anderson, WorldCom, Xerox, and Merck. Just as those cases raised the anguished question of whether U.S.-style capitalism could survive, the subprime and the Lehman crises raise the question of the future of the United States as a great power and the changing structure of the international community. In China, there are also many points of view regarding how to look at the United States. One viewpoint is that the 2008 economic crisis points to the end of U.S. hegemony. A second holds that five hundred years of West- xii Further Thoughts on the Life Expectancy of U.S. Hegemony ern dominance is now in doubt. A third contends that unipolarism is over and that the age of multilateralism and multipolarity has arrived. A fourth is that China has already entered onto the world stage and has become one of the world’s leading powers, along with the United States and Europe. It is, however, too soon to tell which, if any, of these viewpoints is correct because it is not yet clear how the situation will develop. I think we must first acknowledge that there are numerous problems with the domestic economy of the United States and that these problems have definitely weakened the position and influence of the United States with respect to international economic, political, and military affairs. If these problems are not managed well, and if the measures taken to address them fail, then the crisis will get worse and will eventually end the reign of the United States as the world’s only superpower. There can be absolutely no doubt on this score. This does not mean, however, that the only possible future for the United States is bleak. It is also possible that its future will be a good one, and it may also be that, after traversing a difficult period of crisis, it will get back on the right economic track. This is because the factors that I discuss in this book that led to long-term economic growth in the United States are still present. These include a stable political system, a highly developed legal system, a developed education system, abundant human talent, rich resources, a favorable geopolitical environment, top-notch science and technology, and continued military superiority. The United States may recover its developmental vitality and gain more respect internationally providing it does the following things. It must correct the errors it made in unleashing the Iraq War, show more respect internationally for the opinions of other great powers, increase its consultation and cooperation with other countries, cease pursuing arbitrary international policies of force and unilateralism, stop forcing its ideology and values on developing countries, use military force with restraint, and strengthen its self-control. Domestically, it must correct excessive consumption, strengthen financial controls, and deal effectively with economic crime. In sum, U.S. hegemony may already be on the decline. The days of glory when the United States could do whatever it liked are gone never to return. But, if it reflects deeply on the current crisis and chooses the correct path out, its international influence may still be very strong and long lasting. ...

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