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American economic dominance at risk?
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Steve Chiotakis: Well here at home, we’re less than a week away from the day the Treasury Department says the U.S. will default on its debt. And as the world watches the drama over raising the debt ceiling, some experts say it’s further proof American economic dominance is waning.
Alan Beattie is International Economy Editor for the Financial Times — he wrote a book called “False Economy,” which is about the rise and fall of economic empires. And he’s with us now. Hi Alan.
Alan Beattie: Hi, how are you?
Chiotakis: I’m doing well. Is the political situation here in the U.S. share any traits do you think to other economic empires — critical moments?
Beattie: It kind of feels a little like Rome in AD 400. A lot of this is kind of self-inflicted. The fact that the U.S. is genuinely contemplating defaulting on its sovereign debt is not something that’s been forced on it by the financial market. It’s really being forced on it by an ideological decision that’s being taken in Washington. So, if anything it’s sad and it’s even worse than the end of the Roman empire, because it’s self-inflicted.
Chiotakis: If the future of an economy, Alan, is determined by people, as you argue in your book, how do you judge the current human capital in Washington?
Beattie: Putting the words human and Washington into the same sentence is obviously always going to involve taking some of a risk. But, there is certainly I think a worrying lack of experience — a worrying lack of awareness in history. They never had to make compromises, they never had to make deals.
Chiotakis: So looking forward, say 100 years in the future, will America end up looking like the U.K. does today?
Beattie: I think the U.S. will still remain more influential than that. Just because there really is no real alternative country coming up. If you want historical analogy here — you know it kind of checks out quite well. If you think of the British empire as being a bit like ancient Greece, you know, then it was supplanted by the Roman empire, which is the U.S. But then when the Roman empire fell, there were these tribes the Vandals, the Visigoths and the Huns and so on, who were strong enough to burn Rome. But, they didn’t really have the size or organization to run Europe and North Africa the same way. So, that’s kind of the concern I think. It looks a bit like you could get a power vacuum.
Chiotakis: Alan Beattie, the International Economy Editor for the Financial Times. Allan, thank you.
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