America's Global Retreat (Commentary)

President Barack Obama meets in the Situation Room with his national security advisors to discuss strategy in Syria, Saturday, August 31, 2013. (Official White House Photo by Pete Souza)

America's Global Retreat -- Niall Ferguson, Wall Street Journal

Never mind the Fed's taper, it's the U.S. geopolitical taper that is stirring world anxiety. From Ukraine to Syria to the Pacific, a hands-off foreign policy invites more trouble.

Since former Federal Reserve Chairman Ben Bernanke uttered the word "taper" in June 2013, emerging-market stocks and currencies have taken a beating. It is not clear why talk of (thus far) modest reductions in the Fed's large-scale asset-purchase program should have had such big repercussions outside the United States. The best economic explanation is that capital has been flowing out of emerging markets in anticipation of future rises in U.S. interest rates, of which the taper is a harbinger. While plausible, that cannot be the whole story.

For it is not only U.S. monetary policy that is being tapered. Even more significant is the "geopolitical taper." By this I mean the fundamental shift we are witnessing in the national-security strategy of the U.S.—and like the Fed's tapering, this one also means big repercussions for the world. To see the geopolitical taper at work, consider President Obama's comment Wednesday on the horrific killings of protesters in the Ukrainian capital, Kiev. The president said: "There will be consequences if people step over the line."

Read more ....

My Comment: I know that Niall Ferguson has his critics .... but I have always enjoyed his writings, and he does not disappoint in this post.