Hillary: America Has Lost Its Flex

Posted on 10. Nov, 2009 by Joel Schectman in Uncategorized

In a moment of striking candor, Secretary of State Hillary Clinton said that the financial crisis has left America’s power blunted.

The United States, unfortunately, has lost leverage in the world because of the global economic crisis and because of the steps that this administration had to take to try to prevent, frankly, a worldwide depression, which means increasing our debt, going into the biggest deficits we’ve seen since World War II. That undermines some of the capacity we need to have to influence events…

It might be a historic first – a sitting secretary of state predicting the decline of American power.

The comments, made on the Charlie Rose Show last night, were made more surprising when Clinton clarified that even after the crisis ends, America will not get back its flex — we are going to owe too much cash to the countries we want to influence.

But the fact is when we do have that recovery and we can all look at it, touch it and feel it and feel better about ourselves and the world, we’re going to be hugely in debt, and we’re going to have deficits that will impinge upon our ability to make decisions and will also affect our capacity to deal with other countries because we are in debt to them.

The admission or pronouncement, on the Charlie Rose Show last night, was made in the context of Clinton saying that America will reach out to parts of the world that were neglected during the Bush administration.

“We are back,” she said.

And “back” on the big issues that the administration cares about – climate change, Sudan, energy issues.

But why cast the the renewed engagement in the light of lower expectations? Sure being in debt to China is going to make it harder to get them to do what we want – but why say so?

Perhaps with the United States embroiled in two wars that we don’t know if we can win, and heaps of other problems like climate change, or say Darfur, that cannot even hope to be addressed by one nation, Clinton may be doing for the U.S. what many CEOs or many big corporations have been doing in the last six months: Adjusting expectations downward.