How Libya Reflects America's Prosperity Problem

The debate over intervention is really about our declining market share in global influence.

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During the Civil War, the prominent critic James Russell Lowell described President Abraham Lincoln as "so gently guiding public sentiment that he seems to follow it." Then as now, there were firebrands who felt the president was far too timid. But Lowell, an abolitionist who himself wanted harsher action against the southern secessionists, admired Lincoln's reserve. "Perhaps none of our presidents since Washington has stood so firm in the confidence of the people," he wrote, as Carl Sandburg recounted in his classic Lincoln biography. Lincoln's thoughtful restraint made him "the incarnate common-sense of the people."

These days, a deft and subtle leadership style might be appreciated in hindsight, but rarely in real-time. Americans prefer blunt-spoken deciders. Keeping your own counsel went out of fashion when cable news began to demand instant action from politicians. So now we have many critics of President Obama who demand some kind of American intervention in Libya, whose megalomaniacal dictator, Moammar Gadhafi, is locked in a bloody standoff with rebels seeking to end his 41-year reign.

[See 12 ways to stop America's decline.]

There are good reasons to cringe at the spectacle in Libya and demand intervention. First, innocent people are clearly being murdered by a reckless tyrant. Thousands are fleeing to neighboring countries, raising the risk of a humanitarian nightmare. Oh yeah, Libya also controls about 2 percent of the world's oil production, and a near-halt in Libyan shipments is pushing our gas prices uncomfortably high.

So hawks like Republican Sen. John McCain, Independent Sen. Joe Lieberman, and even Democratic Sen. John Kerry are pushing the Obama White House to help the rebels get rid of Gadhafi, and then, uhhh ... well, worry about that later. Kerry even told the New York Times that the United States will look "feckless" if it doesn't do something. Obama, meanwhile, is taking flack for not acting more decisively, even though most options would directly involve the United States in yet another Muslim country, a habit we should be trying to kick, not perpetuate.

There's a thick layer of political gamesmanship to this, of course, but more than that, we're having an argument with ourselves over how much America still matters to the rest of the world. Washington politicians, in their endless nationalist narcissism, seem to forget that the uprisings in Libya and all of the Middle East are not about the United States. We should be thrilled about that, since the presence of American "infidels" in the holy land (Saudi Arabia) and American support for Israel have long served as the rallying cries drawing radical Muslim men to the likes of al Qaeda and others who wish us harm. So there's at least one good reason to stay out of Libya, and force al Qaeda to come up with better pay or retirement benefits, or other ways to lure young jihadis.

[See how higher oil prices will hit your wallet.]

But like an overbearing mother, we feel an impulse to insert ourselves into the drama, because we worry that our fading influence will fade even more if we do nothing. This will be America's foremost preoccupation for the next few decades—even more so in economics, because it will go beyond our global reputation and directly impact our standard of living here at home. In terms of global influence, America's market share is slipping, whether we like it or not. Emerging nations like China and India are now leading the world economy out of recession, while the United States (which is at least better off than Europe) limps behind. Millions of unemployed Americans seem paralyzed as their jobs migrate overseas, and nobody has a clue where new jobs will come from. We're becoming more aware of our own vulnerabilities, but also borderline paranoid: One recent poll found that 47 percent of Americans think China is the world's leading economic power, while just 31 percent feel the United States is No. 1.

You can still prosper with a smaller market share, but only if you aggressively change your business model to keep up with change. That's the challenge Obama faces as he weighs the options for Libya—and its neighbors, if violent revolution should spread. And that's a proxy for what American presidents, policymakers, and CEOs will increasingly face as they seek to sustain their influence in a world that's less compliant with America's agenda than in the past.

[See 5 reasons to stop fearing China.]

One approach is to follow the model of General Motors, which became a wrecked giant that overplayed its hand and lost control of its own future. GM believed that its past glories would guarantee future success, and it refused to imagine a future in which it simply became irrelevant. Then it happened, forcing GM to shrink, oust the narrow-minded lifers who presided over its decline, and be desperately thankful when it got a second chance. As armchair generals call for aggressive moves in Libya, like the imposition of a no-fly zone or the insertion of special forces, it sounds like a chorus of gray-hairs saying we should do the same thing there that we did 15 or 30 years ago someplace else, because if it worked then, it will work now. As if nothing has changed.

The other strategic model is Apple, which transformed a dubious business model more than a decade ago and decided to compete only where it felt it could be effective. Apple doesn't muscle its way into every corner of technology. Instead, it carefully chooses its niches, dominates them, and expands its sphere of influence by delighting consumers with products they didn't even know they needed. That has made Apple—which at its essence merely builds gizmos—a powerhouse in communications, music, video, and now, with the iPad, publishing.

[See why $4 gas need not wreck your budget.]

It's an extremely clever strategy built around vision, the company's strengths, and an awareness of the company's limitations as well. The iPad may, in fact, revolutionize publishing, as Apple hopes. But by partnering with dozens of publishers, Apple is allowing them to believe that they're the ones leading the revolution. Apple and its iconic leader, Steve Jobs, are known for shrewd audacity, but they also have the self-discipline to let others take the lead (or think they are) when it's in their interest to do so. If Washington could learn when to take the podium and when to gracefully step into the background, we might discover that as a nation, we're leading after all—without having to bomb anybody.

Twitter: @rickjnewman

Middle East
Obama, Barack
  • Rick Newman

    Rick Newman is the author of Rebounders: How Winners Pivot From Setback to Success and the co-author of two other books. Follow him on Twitter or e-mail him at

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