Oil prices have tumbled in recent weeks as concerns over Iran's nuclear ambitions have taken a backseat to worries about Europe's debt crisis and the slowing global economy. But talks between Iran and U.N. negotiators continue and, despite reports of progress, the outcome is far from certain.
In the end, the most likely outcome is Iran having "a nuclear program with breakout capacity that everybody knows about and that we deal with," predicts Ian Bremmer, president of Eurasia Group.
And by "deal with," Bremmer does not mean via military action.
Despite tough rhetoric from both President Obama and GOP Presidential candidate Mitt Romney, "we're not going to do anything," other than lead the effort on sanctions, he says. "These are kind of decision that don't get taken in a 'G-Zero' world that create a lot more crises that don't get responded to effectively."
The U.S. taking a less proactive role with Iran is just one example of the new world order Bremmer describes in his latest book: Every Nation for Itself: Winners & Losers in a G-Zero World.
Since World War II, the world has generally revolved around the capital, priorities, political and economic systems of America and her allies, as represented by the G8 and later the G20, he explains. "We're not prepared to do that kind of lifting anymore and frankly neither are our allies and the emerging markets are not prepared to play that role either."
As a result, Bremmer sees a world in which America plays a less active role and regional conflicts and crises are largely left to regional powers to address, whether its removing Bashar al-Assad from power in Syria, bailing out Europe or dealing with Afghanistan (and Pakistan) if they descend into anarchy.
"That means a very different economic and political environment than the one we've experienced for decades," he says.
In the long term, 'G-Zero' means "a whole lot more risk and volatility" but near-term there are some benefits for America, according to Bremmer. "The U.S. looks much more like a safe haven, which puts less pressure on us to deal with the long-term issues we probably need to address, [namely] the deficit. Near term it's a benefit for the U.S."
That said, dysfunction and partisanship are carrying the day in Washington right now andit doesn't seem as if our politicians are going to take advantage of the "grace period" the bond market is giving America to deal with its fiscal issues.
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