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History has been closing in on Britain for some time.
The rise of giant emerging economies like China and India always meant that Britain would have a smaller seat at the increasingly crowded top table of nations.
It also meant that the United States would recalibrate the so-called special relationship as it sought new partners and alliances, inevitably shrinking the disproportionate role Britain has long played in world affairs.
Tony Blair, made a final stab at greatness with what amounted to a 51st-state strategy: by locking Britain into America's wars—on terror, in Afghanistan, and in Iraq—London achieved an importance it hadn't had since Churchill and the war.
Blair may merely have postponed the inevitable: a lesser Britain is a consequence of world events.
The great engine room of British prosperity, the financial sector, now feels like an anchor.
Britain has slipped into deflation—a decline in general price levels—for the first time in 50 years.
The IMF believes Britain's economic slump will be deeper and longer than that of any other advanced economy.
The number of Britons claiming unemployment benefits has jumped from 1.3 million (4.6 percent of the workforce) in 1999 to more than 2 million and is on track to top 3 million.
The Organization for Economic Cooperation and Development says Britain's recovery may begin later this year, but will lag behind those of other rich countries.
Britain is arguably saddled with the worst public finances of any major nation, thanks to voracious spending in recent years and to borrowing that is growing faster than in other developed nations or even fast-growing developing ones.
Britain is so heavily indebted that one political commentator dubbed it "Iceland-on-Thames," suggesting Britain could follow that nation into bankruptcy.
What makes the British case stand out even more is that it is the only country of its size in recent history that has sought such a disproportionately large role on the world stage.
During the Cold War, Margaret Thatcher saw herself as second only to Ronald Reagan as a leader who helped to bring down the Soviet Union and make the world safe for capitalism.
During Blair's decade in office, Britain fought three wars—in Kosovo, Afghanistan, and Iraq—in which its military participation was right behind that of the United States.
Now that's changing. "Although we are a relatively wealthy country and we have a seat on the U.N. Security Council, we are a power in decline," says Ian Kearns of the Institute for Public Policy Research.
The U.K. still maintains one of the largest defense budgets in the world, but probably not for much longer.
Britain's role in the world will shrink with its budget.
The glory days of the City of London are now grinding to a halt, too.
The European Union has already endorsed the creation of a Systemic Risk Board with oversight powers that will include the City, even though Britain is outside the euro zone and is not a member of the European Central Bank, whose members will appoint the SRB chair.
Britain has sidestepped such intervention in the past, but this time is different.
Germany and France appear intent on restraining the excesses of Anglo-Saxon capitalism and may seek to engineer reforms that steer a greater share of global capital flows into more cautious continental hands.
If European regulations are "harmonized" to include London and if London's light touch gets a little heavier, the City could suddenly become "more antagonistic to the institutions that are being regulated," as Andrew Hilton of the Centre for the Study of Financial Innovation in London puts it.
In that event, financial centers like Singapore and Hong Kong could draw business away from the City.
As America turns to building new ties with the advancing powers of Asia and Latin America—even sending its top envoys to promise its creditors in China that the U.S. will handle its debts responsibly—-Britain can only feel less special.
http://www.thedailybeast.com/newsweek/2009/07/31/forget-the-great-in-britain.html
The rise of giant emerging economies like China and India always meant that Britain would have a smaller seat at the increasingly crowded top table of nations.
It also meant that the United States would recalibrate the so-called special relationship as it sought new partners and alliances, inevitably shrinking the disproportionate role Britain has long played in world affairs.
Tony Blair, made a final stab at greatness with what amounted to a 51st-state strategy: by locking Britain into America's wars—on terror, in Afghanistan, and in Iraq—London achieved an importance it hadn't had since Churchill and the war.
Blair may merely have postponed the inevitable: a lesser Britain is a consequence of world events.
The great engine room of British prosperity, the financial sector, now feels like an anchor.
Britain has slipped into deflation—a decline in general price levels—for the first time in 50 years.
The IMF believes Britain's economic slump will be deeper and longer than that of any other advanced economy.
The number of Britons claiming unemployment benefits has jumped from 1.3 million (4.6 percent of the workforce) in 1999 to more than 2 million and is on track to top 3 million.
The Organization for Economic Cooperation and Development says Britain's recovery may begin later this year, but will lag behind those of other rich countries.
Britain is arguably saddled with the worst public finances of any major nation, thanks to voracious spending in recent years and to borrowing that is growing faster than in other developed nations or even fast-growing developing ones.
Britain is so heavily indebted that one political commentator dubbed it "Iceland-on-Thames," suggesting Britain could follow that nation into bankruptcy.
What makes the British case stand out even more is that it is the only country of its size in recent history that has sought such a disproportionately large role on the world stage.
During the Cold War, Margaret Thatcher saw herself as second only to Ronald Reagan as a leader who helped to bring down the Soviet Union and make the world safe for capitalism.
During Blair's decade in office, Britain fought three wars—in Kosovo, Afghanistan, and Iraq—in which its military participation was right behind that of the United States.
Now that's changing. "Although we are a relatively wealthy country and we have a seat on the U.N. Security Council, we are a power in decline," says Ian Kearns of the Institute for Public Policy Research.
The U.K. still maintains one of the largest defense budgets in the world, but probably not for much longer.
Britain's role in the world will shrink with its budget.
The glory days of the City of London are now grinding to a halt, too.
The European Union has already endorsed the creation of a Systemic Risk Board with oversight powers that will include the City, even though Britain is outside the euro zone and is not a member of the European Central Bank, whose members will appoint the SRB chair.
Britain has sidestepped such intervention in the past, but this time is different.
Germany and France appear intent on restraining the excesses of Anglo-Saxon capitalism and may seek to engineer reforms that steer a greater share of global capital flows into more cautious continental hands.
If European regulations are "harmonized" to include London and if London's light touch gets a little heavier, the City could suddenly become "more antagonistic to the institutions that are being regulated," as Andrew Hilton of the Centre for the Study of Financial Innovation in London puts it.
In that event, financial centers like Singapore and Hong Kong could draw business away from the City.
As America turns to building new ties with the advancing powers of Asia and Latin America—even sending its top envoys to promise its creditors in China that the U.S. will handle its debts responsibly—-Britain can only feel less special.
http://www.thedailybeast.com/newsweek/2009/07/31/forget-the-great-in-britain.html
