While the media are drawn to the story of the day, which today means the killing of Baitullah Mehsud in Pakistan and the longevity of the "cash for clunkers" program here at home, it is essential for the Obama administration to keep its eye on the strategic ball. In short, while the administration was absolutely right to triage the domestic economy and global crises like Iraq and Afghanistan during its first six months, the President and his most senior advisors must now turn to the great questions of statecraft: great power relations and America's role in the world.
The reality is that the post-war global order, in which the United States asserted a de facto strategy of hegemony, is now irretrievably dysfunctional and, when it comes down to it, triggered the domestic and foreign crises that consumed the president's agenda until now.
That old strategy, as our colleague Michael Lind has written, was founded on a simple bargain: Washington would let the rest of the world export to the American consumer, hollowing out our own manufacturing base but subsidizing our consumer lifestyle. In return, we would assert a kind of global hegemony, using the tools of foreign policy (our military budget and capabilities) to dissuade the rise of peer competitors, to reassure the world's powers that we would take care of common threats (Iraq, Afghanistan, Serbia), and in those cases of resistance to our hegemony, to coercively disarm them (Iran, North Korea).
It was always a time-limited gambit and time finally ran out a year ago when the economic foundation of the strategy collapsed spectacularly in the U.S. housing crisis. Addicted to the false security of bundled American home mortgages, Wall Street built a house of un-priceable derivatives on the sand of irresponsible sub-prime mortgages - fueled by easy access to credit provided by exporting nations like China, Japan, Germany and the Gulf States. Borrowing against rising home prices to keep consumption high, American households lost trillions in home value and cut back dramatically on consumption - such that Chinese exports fell 30 percent.
At the same time, our over-stretched military was finding it harder and harder to find the budget and the manpower to match the operations tempo that hegemony required. And despite today's confirmation of Baitullah Mehsud's death, it looks increasingly like that operations tempo will only remain high, if not get higher.
