The US has 330 million citizens, which is less than 5% of the world’s population. Yet its GDP footprint is around 25% of global GDP. How is that possible? While leading-edge technological innovation and a giant military undoubtedly help, what’s really been the secret sauce for the past 30 plus years is the global role of the dollar. The rest of the world needs a savings asset and the US provides it through massive debt issuance and the global role of the dollar in international trade. This has enabled the US to import vast quantities of  TVs, Cars, Computers, and everything else you can think of, while paying for it all with digital IOU'S that bear 2% called Treasury bills.  

The problem with this model is that if you import everything you stop making your own things and you hollow out your industrial base. Both Biden and Trump saw this. Biden sought green re-industrialization through the IRA. Trump seeks re-industrialization through doubling down on the carbon-economy, which constitutes the growth model of GOP states in the US.  

If a Trump administration doubles down on carbon, the short term boost to growth through lower input prices plus deregulation will be huge. Possibly enough to propel a two-term administration. Climate denial can be profitable. But the rest of the world, China, Europe and East and South Asia, will continue to develop the green technologies needed to survive in the 21st century. The US will fall behind in this critical area as the countries involved in the green transition trade more intensely with each other. The knock-on effect will be that the global role of the dollar shrinks. First, because the issuer doesn’t like the side effects any more. Second, because in a post carbon world, who needs a currency that denominates and is backed by carbon assets that no one else uses any more? In short, the US’s addiction to carbon and the politics that it produces risks burning down the house.

Meet our speaker and chair 

Mark Blyth is the William R. Rhodes ’57 Professor of International Economics  and the Director of the Rhodes Centre for International Economics and Finance at the Watson Institute for International and Public Affairs at Brown University. He holds a joint appointment in the department of political science. He is the author many award-winning books including, Austerity: The History of a Dangerous Idea (New York: Oxford University Press 2015), Angrynomics (New York: Columbia University Press 2020), Diminishing Returns: The New Politics of Growth and Stagnation (Oxford University Press 2022), and forthcoming in 2025, Inflation: A Guide for Users and Losers. He writes about the politics of growth, distribution and decarbonization and why people continue to believe dubious economic ideas despite buckets of evidence to the contrary.

Benjamin Braun is Assistant Professor in Political Economy, LSE European Institute

More about this event

The European Institute (@LSEEI) is a centre for research and graduate teaching on the processes of integration and fragmentation within Europe.

Burning down the house: carbon politics, American power, and the almighty Dollar

08 Scaling social innovation at LSE, Kayleigh Cunoosamy

09 The new facts of life, Professor Emily Jackson

10 Children's visions of digital futures, Kym Sylwander & Aisling

11 How can data help us to understand and address complex problems? Dr Alexandra Gomes

13 What is it like to be interviewed by AI, and how will it transform research? Justine Nayral

12 Perceptions of inequality - what do we really know? Queena Chong

On the May 7th, 2025, India launched missile strikes on Pakistan in response to a terrorist attack in Indian-administered Jammu and Kashmir on April 22nd. On May 10th a ceasefire was reached following mediation from the United States. 

To discuss the US’ part in brokering a ceasefire, and the US’ responses to disputes between India and Pakistan over the past three decades, in June 2025 the Phelan US Centre spoke to Lisa Curtis, senior fellow and director of the Indo-Pacific Security Program at the Center for a New American Security. 

The conversation covers the recent India–Pakistan crisis and the US’ role, how US involvement in the Kashmir dispute has evolved over the years, and how China’s growing influence has complicated how the US approaches India–Pakistan relations. 

This episode was produced by Chris Gilson and Luke Digweed.   

Further reading and resources 

“How America Can Keep the Peace Between India and Pakistan”, Foreign Affairs, May 13, 2025 

“Democracy in South Asia amid U.S. Aid Cuts What’s at Stake for Great Power Competition”, Center for a New American Security, May 15. 2025 

LSE: The Ballpark | The US and India–Pakistan tensions with Lisa Curtis

In January 2025, the release of a new model and chatbot by Chinese artificial intelligence (AI) company, DeepSeek, sent shockwaves through the tech industry in the US and elsewhere. DeepSeek’s launch was only one milestone in the ongoing AI competition between China and the US which has seen the US try to restrict the exports of key components used in AI development to other countries.

In the second episode of The Ballpark’s miniseries on AI and the US, the Phelan US Centre explored the ongoing AI competition between China and the US with Angela Zhang, Professor of Law at the Gould School of Law of the University of Southern California. Professor Zhang is an expert on AI regulation, both in China and globally.

They spoke about China’s current approach to AI regulation, and how this compares with the US, and why China may be content with being a “close second” in the AI race.

Further reading and resources

•	High Wire: How China Regulates Big Tech and Governs Its Economy by Angela Huyue Zhang (Oxford University Press, 2024)
•	The Promise and Perils of China’s Regulation of Artificial Intelligence, Columbia Journal of Transnational Law, 21 January 2025


LSE: The Ballpark | The US-China AI race with Professor Angela Zhang

In response to what the US sees as potential growing threats from China and North Korea, nuclear weapons are becoming a more and more important part of US alliance commitments and partnerships in East Asia. But what does this focus on nuclear weapons for both deterrence and reassurance mean for US foreign policy and for the security of the region? And could there be an alternative which puts a greater focus on conventional armed forces?

To discuss these topics, in June 2025 the Phelan US Centre spoke to Dr Lauren Sukin about her recent article, in the Journal for Peace and Nuclear Disarmament, with Samuel Seitz of MIT, “Deemphasizing Nuclear Weapons in Nuclear Deterrence: The Case for Conventional Counterforce”. Dr Sukin is Assistant Professor in LSE’s Department of International Relations and a Centre Affiliate at the LSE Phelan US Centre. 

Further reading and resources

-	Seitz, S. and Sukin, L. (2025). Deemphasizing Nuclear Weapons in Nuclear Deterrence: The Case for Conventional Counterforce. Journal for Peace and Nuclear Disarmament, [online] 8(1), pp.15–35. 

LSE: The Ballpark | Deemphasizing Nuclear Weapons in Nuclear Deterrence with Dr Lauren Sukin

In July 2025 the Phelan US Centre spoke to Professor Kimberley S. Johnson, Professor of Social and Cultural Analysis at New York University and the John G. Winant Visiting Professor of American Government at the University of Oxford, about the recent history of the US administrative state and racial representation in the US government and administration They also discussed the second Trump administration’s moves to dismantle Diversity, Equity and Inclusion measures in the US government as part of Project 2025

This episode was produced by Chris Gilson and Luke Digweed.  

Further reading and resources

•	Dark Concrete: Black Power Urbanism and the American Metropolis by Professor Kimberley S. Johnson (Cornell University Press, 2025) – to be published on 15 December 2025
•	Reforming Jim Crow: Southern Politics and State in the Age Before Brown by Professor Kimberley S. Johnson (Oxford University Press, 2010)
•	Governing the American State: Congress and the New Federalism, 1877-1929 by Professor Kimberley S. Johnson (Princeton University Press, 2007)


LSE: The Ballpark | The Administrative State with Professor Kimberley S. Johnson

The LSE European Institute,  is a world class centre for the study of Europe. Follow our podcast feed, for the latest analysis and research  on European politics and current affairs, and the policy challenges confronting the EU and the UK.

Burning down the house: carbon politics, American power, and the almighty Dollar

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