The United States’ problems are notable and can be summarized with the following phrase: those who want to consume don’t have the money, and those with the money don’t know what to spend it on. And the presidential campaign, with all its slogans, has launched impactful solutions, imagining an economy that works for everyone– not only for the top 1% of the population– hypothesizing universal healthcare, free public universities, and that the wealthy and corporations pay their fair share of taxes. Despite being a country with a flexible workforce, the US has at this point definitively lost its industrial vocation.
After my recent trip to Washington, between visits to congress and some very interesting think thanks, I can say without a shred of doubt that the principle questions on the US’ agenda will follow a populist and isolationist orientation that American public opinion has been hoping for for some time. Independently of who succeeds Obama in the White House, this cannot happen.
First of all, let’s clear up any misunderstandings. With the bicameral system, the premise is that the winner will not be able to radically alter the country’s laws because even if the Senate acquires a Democratic majority, the House will remain republican and the new president will not have free reign but will in any case need to manage consensus in a bipartisan way.
Having said this, a “must” is the devaluation of the dollar. Considering that increasing tariffs and forcing companies to repatriate production to the US represent– both technically and politcally– impractical solutions, the administration’s only move to limit the growing trade deficit is to devalue their own currency. And then, finally, we can address the issue of infrastructure, which need to be modernized very badly. In fact, it is so dated that its age will cost the US economy billions of dollars in terms of lost productivity. For example, a study conducted by the American Society of Civil Engineers revealed that the damage to the GDP will equal $4 trillion between 2016 and 2025 in terms of lost sales and productivity. According to the same report, the required investments total $3.32 trillion. So, this issue cannot be postponed, and modernizing US infrastructure after ignoring it for 50 years will invigorate the US economy, freeing investments and creating jobs.
Regarding international questions, they’ll do the “Russian mend,” in the sense that the US cares very little about the crisis in Ukraine and the delicate relationship between Russia and the European Union, therefore it’s more than plausible that the US will attempt to repair economic ties with Russia. I foresee a pretty rapid end to sanctions.
Still on the subject of “foreigners,” I see some very important and inevitable disengagements in geo-political-military terms.
The first is toward Asia. Washington took note of Obama’s “Pivot to Asia’s” bankrupt outcome– fruit of American hegemony over the last forty years acting as the world’s policeman– thus it’s resigned to giving up its vital space in the Asian continent to China, playing with remittances supporting Japan, The Philippines, and Vietnam. Meanwhile, on the economic field (speaking precisely about trade and investment), contrary to Chinese hopes, China will not sign a bilateral agreement with the US because Americans are not willing to endure the wave of Chinese investment inundating Europe and they certainly will not give China market economy status after they ignored all of the WTO’s rules.
The second disengagement concerns the crisis in the Middle East, and simply that the US will leave the EU to take care of it. The US realized that the issues in the Middle East cannot be resolved, with the result that Europeans will find themselves more and more alone and with less military support. And the consequence? It has everything to do with us. We will have to learn how to go it alone, also and especially militarily. It won’t be easy.