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I get more than a little bit worried when I look at the American political circus. The soft power the US once held has now been eroded by the steady stream of W

I get more than a little bit worried when I look at the American political circus. The soft power the US once held has now been eroded by the steady stream of WTFs coming out of the country. I think that what most Americans don't realise is that when people threaten to shut down the American government over women's healthcare - the craziness shakes up the risk calculus of the world and people start searching for alternatives. This is bad for America and it's bad for the world. For the longest time, we've been under a hegemony that was originally far more stable than the world before it. This has helped to bring an unprecedented era of prosperity. The American empire is perhaps the first empire in history where people want to be under its banner as opposed to out in the cold.† But current antics threaten that very tenuous stability that was fought over for so many centuries. It is not without any faults, but out of all the alternatives out there - this is the most peaceful one. Yes, there are arguments that broadening the base of support will help not hinder stability.ß The fact remains that this is the best system we have found so far and it does actually work. We might even someday have something far more stable than this, but the transition to that is not going to be easy. In fact, I think that on the existential risks meter of the world - stabilising American hegemony should be a priority. It is vital that this system is maintained until a better one emerges to take its place. People might disagree, but it really is a tragedy that countries and groups now want to overthrow the American hegemony largely due to political missteps at home and a steady disconnect between what it means to be hegemon and the day-to-day of American politics. They've forgotten that their alliances were built upon shaky ground and need upkeep to maintain. And that even the firmest of empires do fall. † http://www.middlebury.edu/media/view/214721/original/OdomPaper.pdf http://www.middlebury.edu/media/view/214721/original/OdomPap... ß http://www.economist.com/blogs/democracyinamerica/2012/02/world-order http://www.economist.com/blogs/democracyinamerica/2012/02/wo...

hueving 11y ago
The risk you talk about does not seem to exist in the real markets. If the US were viewed as unstable like you suggest, it would be priced into US bonds, which are trading near all time highs. If there is a risk in there, it's nearly negligible.
- eru 11y ago
  US bonds are priced in USD. If the USD is expected to collapse (if at all) if and only if the US bonds collapse, what would you see in the prices?
  - cheriot 11y ago
    US government bonds would need higher interest rates to convince people to hold their wealth in dollars. Higher interest rates means the price of bonds would go down.
  - hueving 11y ago
    You would see a collapse in the prices. People with USD would stop buying them as well and would start buying gold/silver/other currencies. You are confusing currency with bonds.
  - zkhalique 11y ago
    At least US bonds being priced in USD does reflect the risk and demand associated with them. What I wonder is, how is inflation being calculated in terms of the CPI, which is essentially prices in dollars? After all, what exactly is being measured by this? If dollars the very currency which is being printed, how does measuring prices account for how much M0 money there is?
    - forgetsusername 11y ago
      >After all, what exactly is being measured by this? Purchasing power of Americans. >how does measuring prices account for how much M0 money there is? Why does it need to? On its own, the amount of M0 is irrelevant. We care about how the effects of supply manifest in prices.
  - 3pt14159 11y ago
    US bonds are priced in percent growth, just like all bonds. If the markets expect that the US is going print money to pay off bonds then the interest rates on US bonds would go up, since the future exchange rate is expected to go down.
arbuge 11y ago
>> The American empire is perhaps the first empire in history where people want to be under its banner as opposed to out in the cold. This kind of thing has happened before in some cases. Malta wanted to be part of the British Empire when the French left in the early 19th century. Of course "wanted" might need to be taken with a pinch of salt, given that representative democracy and polling were not established procedures at the time.
- knight17 11y ago
  I have read (not sure) that Lee Kuan Yew wanted Singapore to become a British protectorate. In his calculation it was a waste to spend money on a military when it was in short supply.
humanrebar 11y ago
> I think that what most Americans don't realise is that when people threaten to shut down the American government over women's healthcare - the craziness shakes up the risk calculus of the world and people start searching for alternatives. That's a pretty poor summary of the controversy. It's not like the U.S. is debating whether women should have Pap smears every two years or every three years. If that's how the international media is presenting the controversy, it wouldn't surprise me that the U.S. would come across poorly.
- maxsilver 11y ago
  > It's not like the U.S. is debating whether women should have Pap smears every two years or every three years. As an American, that sounds like an fairly accurate summary to me. A sizable number of US elected officials are fighting to defund/shutdown the largest women's healthcare provider in the nation. But regardless of any opinions on that specific issue -- It seems completely rational to me that the international community might consider American currency "higher risk", when we're increasingly threatening to shut down our federal government over reasonably-straightforward issues that most developed nations resolved decades ago (like healthcare). I assume our multiple recent debt-ceiling crises probably add to that risk profile too.
  - humanrebar 11y ago
    There's a fight to stop providing public funds for abortion-providers, especially given recent discoveries about, to put it charitably, gaffes and ethical lapses on the part of Planned Parenthood, an organization that exists, both in philosophy and financially, due to the abortions it provides. Congress is wholly empowered to pass any budget it likes. If President Obama wants to veto a budget to cater to a special interest group, I suppose that's his right, too. We obviously don't want that, but the White House and Congress aren't exactly looking for joint action on this. The frustrating thing about this whole controversy is that there are compromises here (like bringing late-term abortion restrictions in line with international norms), but entrenched special interests are pushing nuclear options since nobody can stomach understanding their opponents. As a community heavier in skeptics and rationalists than the general public, I would hope HN and the tech community to be good examples in promoting understanding and finding compromise.
erichmond 11y ago
"I think that what most Americans don't realise is that when people threaten to shut down the American government over women's healthcare - the craziness shakes up the risk calculus of the world and people start searching for alternatives. This is bad for America and it's bad for the world." Great point, but I think Americans would mostly fall into two camps. - Those who realize how bad it is, and are eternally frustrated at our politicians. - Those who don't care about the world at large. (my feeling is due to lack of education, but that is my own bias) But I really agree with you, political circus is the perfect way to put it.
- deleted 11y ago
  [deleted]
- happyscrappy 11y ago
  No risk calculus has been shaken, there is no fiscal angle to the haggard abortion grandstanding. Has America ever not repaid?

hueving 11y ago

The risk you talk about does not seem to exist in the real markets. If the US were viewed as unstable like you suggest, it would be priced into US bonds, which are trading near all time highs. If there is a risk in there, it's nearly negligible.

eru 11y ago
US bonds are priced in USD. If the USD is expected to collapse (if at all) if and only if the US bonds collapse, what would you see in the prices?
- cheriot 11y ago
  US government bonds would need higher interest rates to convince people to hold their wealth in dollars. Higher interest rates means the price of bonds would go down.
- hueving 11y ago
  You would see a collapse in the prices. People with USD would stop buying them as well and would start buying gold/silver/other currencies. You are confusing currency with bonds.
- zkhalique 11y ago
  At least US bonds being priced in USD does reflect the risk and demand associated with them. What I wonder is, how is inflation being calculated in terms of the CPI, which is essentially prices in dollars? After all, what exactly is being measured by this? If dollars the very currency which is being printed, how does measuring prices account for how much M0 money there is?
  - forgetsusername 11y ago
    >After all, what exactly is being measured by this? Purchasing power of Americans. >how does measuring prices account for how much M0 money there is? Why does it need to? On its own, the amount of M0 is irrelevant. We care about how the effects of supply manifest in prices.
- 3pt14159 11y ago
  US bonds are priced in percent growth, just like all bonds. If the markets expect that the US is going print money to pay off bonds then the interest rates on US bonds would go up, since the future exchange rate is expected to go down.

arbuge 11y ago

>> The American empire is perhaps the first empire in history where people want to be under its banner as opposed to out in the cold. This kind of thing has happened before in some cases. Malta wanted to be part of the British Empire when the French left in the early 19th century. Of course "wanted" might need to be taken with a pinch of salt, given that representative democracy and polling were not established procedures at the time.

knight17 11y ago
I have read (not sure) that Lee Kuan Yew wanted Singapore to become a British protectorate. In his calculation it was a waste to spend money on a military when it was in short supply.

humanrebar 11y ago

> I think that what most Americans don't realise is that when people threaten to shut down the American government over women's healthcare - the craziness shakes up the risk calculus of the world and people start searching for alternatives. That's a pretty poor summary of the controversy. It's not like the U.S. is debating whether women should have Pap smears every two years or every three years. If that's how the international media is presenting the controversy, it wouldn't surprise me that the U.S. would come across poorly.

maxsilver 11y ago
> It's not like the U.S. is debating whether women should have Pap smears every two years or every three years. As an American, that sounds like an fairly accurate summary to me. A sizable number of US elected officials are fighting to defund/shutdown the largest women's healthcare provider in the nation. But regardless of any opinions on that specific issue -- It seems completely rational to me that the international community might consider American currency "higher risk", when we're increasingly threatening to shut down our federal government over reasonably-straightforward issues that most developed nations resolved decades ago (like healthcare). I assume our multiple recent debt-ceiling crises probably add to that risk profile too.
- humanrebar 11y ago
  There's a fight to stop providing public funds for abortion-providers, especially given recent discoveries about, to put it charitably, gaffes and ethical lapses on the part of Planned Parenthood, an organization that exists, both in philosophy and financially, due to the abortions it provides. Congress is wholly empowered to pass any budget it likes. If President Obama wants to veto a budget to cater to a special interest group, I suppose that's his right, too. We obviously don't want that, but the White House and Congress aren't exactly looking for joint action on this. The frustrating thing about this whole controversy is that there are compromises here (like bringing late-term abortion restrictions in line with international norms), but entrenched special interests are pushing nuclear options since nobody can stomach understanding their opponents. As a community heavier in skeptics and rationalists than the general public, I would hope HN and the tech community to be good examples in promoting understanding and finding compromise.

erichmond 11y ago

"I think that what most Americans don't realise is that when people threaten to shut down the American government over women's healthcare - the craziness shakes up the risk calculus of the world and people start searching for alternatives. This is bad for America and it's bad for the world." Great point, but I think Americans would mostly fall into two camps. - Those who realize how bad it is, and are eternally frustrated at our politicians. - Those who don't care about the world at large. (my feeling is due to lack of education, but that is my own bias) But I really agree with you, political circus is the perfect way to put it.

deleted 11y ago
[deleted]
happyscrappy 11y ago
No risk calculus has been shaken, there is no fiscal angle to the haggard abortion grandstanding. Has America ever not repaid?