The Problem with Isolationism

by on September 25th, 2010
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When it comes to international action, Herman Cain wants the United States out of the driver’s seat. Whether it’s the credit crisis in Europe or human rights in the Arab world, Washington shouldn’t take up the mantle.

The mantra is put others in front. The U.S. should follow — only if others lead.

“The United States should not be the sole one to try and prevent (the financial) crisis in Europe,” the embattled GOP presidential candidate told the editorial board of New Hampshire’s Union Leader.

“Just like in Libya…The president said we’re going to lead from behind; we expended more in military resources — over a billion dollars more than any European country. They had the most to gain and the most to lose in terms of their oil; most of it goes to Europe. They should have taken a bigger leadership role. They should have spent more money to support the folks that we were trying to support.

“…Same thing relative to this crisis. Who has the most to win or lose? Europe. And if I were president, I would insist that the European countries step up to the plate before the United States would put more of its resources. Yes, there would be an impact on the United States because we sell a lot of goods to European countries and vice versa. But I don’t think we should be the primary savior of that country.”

Never mind that Cain seems unsure about Europe’s status as a continent. What’s striking about his position is that it betrays a fundamental ignorance about the nature of the contemporary international system — a system with deep ideological and institutional ties to the United States.

Indeed, U.S. involvement in the European muddle is both necessary and proper. Necessary, because like the rest of the word, European lenders rely heavily on the U.S. dollar. As the principal international currency since Bretton Woods, dollar liquidity is vitally important to capital mobility and global market stability. And as “the ultimate supplier of this liquidity,” to quote the macroeconomist Robert E. Keleher, international lender of last resort responsibilities “fall upon the Federal Reserve.”

By tightening or easing its monetary policy, the U.S. central bank controls availability and access to the world’s dominant international reserve asset. We therefore have a special obligation to make sure there’s enough cash to go around.

U.S. involvement is proper — at least in part — because U.S. investment banks created the currency and credit derivatives structures that helped shaky European economies hide their mounting deficits and debt. In other words, we enabled the problem we’re now trying so desperately to solve.

Contrary to Cain’s assertion, our involvement in Europe has less to do with American benevolence and more to do with the responsibilities that attach to being the cornerstone of the international financial system.

In Libya, too, a dominant U.S. military role only reflects the continued structural dominance of the United States in the North Atlantic Treaty Organization. Let’s remember that throughout the alliance’s history, the United States has spent a larger share of its GDP on defense than have most of its partners. Is it any wonder, then, that we possess assets and capabilities no others can match?

On a related note, the headquarters of the United Nations is not in New York City by accident. And the organization’s founding charter is held permanently by the National Archives of the United States for a reason: The international world order we know today is, in design and reality, an American world order.

That being the case, it’s simply not possible for the U.S. to look away when a troubled world comes knocking.


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