Aside from the Democrat primaries, the major talking point in the U.S. this week is whether the United States is losing ground in the global economy. This is different to the question of whether or not the U.S. economy is in recession (or 'slowdown' as GWB prefers to put it), but is rather about whether the U.S. is losing the competitive race against the emergent economies of East Asia and the Middle East, and indeed to Europe.
Two triggers to this have been Thomas Friedman's 'Who will tell the people' article in the New York Times, and the launch of Zareed Fakaria's book, The Post-American World and the various articles and TV appearances he has made around that. Both are arguing that as much of the world has adopted a free trade, pro-globalization agenda - as the U.S. campaigned for them to do throughout the 1980s and 1990s - the ability to compete successfully in the global market is understood mostly in terms of its threat to the U.S. economy.
Fakaria likes to use examples of 'big things' to make his point (Where's the world's biggest mall? - Beijing). Friedman compares the slow death experience of time spent at a major U.S. airport to the resort/business club experience of spending time at Hong Kong International Airport or Changi airport in Singapore. But both are saying that, having mostly won the arguments about globalization and freeing up international trade, the U.S. polity has largely failed to consider the implications for the U.S. itself of a more competitive global trading regime.
I am struck by how this debate differs in the U.S. to how it plays out in Australia. The Democratic Party in the U.S. is far more protectionist than the Australian Labor Party. This particularly cam through in Hillary Clinton's campaign, where her two biggest rallying points - opposing NAFTA and getting tough on China - struck an odd tone, given that the signing of NAFTA and opening up the space for China to join the WTO were probably the two major trade policy achievement of Bill Clinton's administration.
There is also no equivalent to, say, Paul Keating in the U.S. context, who would say that protectionism s a short-term measure that costs consumers and ultimately won't save jobs, and that more trade with countries such as China not only means the relocation of steel and textile jobs, but cheaper consumer goods and the scope to develop new jobs further up the industry value chain. This is despite the fact that parts of the country that aren't obvious beneficiaries, such as North Carolina and Virginia, are becoming more prosperous and middle-class as they develop more knowledge-based industries.
A belated processing - Last week I finally wrote the email I have been dreaming of writing for 3 years. It was sent to my publisher, along with the draft of my new book, Counterp...
2 weeks ago