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May 6, 2008
America in decline or the rest of the world rising?
Does it really matter which it is? Either way we don't feel like we are the biggest kid on the block anymore. It's not that we grew smaller it's that the other kids got bigger. The value of the dollar is dropping and the price of gas is going up because more people in China and India are driving cars. And the price of diesel is going up because people in Europe use it in their cars. America is not in charge of her destiny anymore. The unease manifest itself in polls showing 81% of Americans think we are on the wrong track. Fareed Zakaria has the story in Newsweek.
Look around. The world's tallest building is in Taipei, and will soon be in Dubai. Its largest publicly traded company is in Beijing. Its biggest refinery is being constructed in India. Its largest passenger airplane is built in Europe. The largest investment fund on the planet is in Abu Dhabi; the biggest movie industry is Bollywood, not Hollywood. Once quintessentially American icons have been usurped by the natives. The largest Ferris wheel is in Singapore. The largest casino is in Macao, which overtook Las Vegas in gambling revenues last year. America no longer dominates even its favorite sport, shopping. The Mall of America in Minnesota once boasted that it was the largest shopping mall in the world. Today it wouldn't make the top ten. In the most recent rankings, only two of the world's ten richest people are American. These lists are arbitrary and a bit silly, but consider that only ten years ago, the United States would have serenely topped almost every one of these categories.He goes on to say that while we are arguing over why they hate us. "They" have moved on, "The world has shifted from anti-Americanism to post-Americanism". Here he describes the new world we are part of:
At the military and political level, we still live in a unipolar world. But along every other dimension-industrial, financial, social, cultural-the distribution of power is shifting, moving away from American dominance. In terms of war and peace, economics and business, ideas and art, this will produce a landscape that is quite different from the one we have lived in until now-one defined and directed from many places and by many peoples.It looks like this globalization we've been pushing has worked a little too well. I'm thinking about joining the protesters at the next WTO meeting. But on second thought maybe things are not as bleak as they seem, on page 6 of the article we finally get some good news:
Over the last 20 years, globalization has been gaining depth and breadth. America has benefited massively from these trends. It has enjoyed unusually robust growth, low unemployment and inflation, and received hundreds of billions of dollars in investment. These are not signs of economic collapse.Thomas Friedman was also optimistic about our economy in an interview he gave back in 2005 titled "Wake up and face the flat earth" in it he explains how Dell, UPS and Walmart have prospered by going global.
I really dove into some key companies that are now globalizing and are really the source for understanding globalization. Wal-Mart, UPS - these are companies we don't traditionally think of as being goldmines of insights into globalization, but in fact if you understand what's going on inside these companies, you can get an amazing view of the flattening of the global playing field and the forces that are doing it.Globalization may even bring peace to the world, according to Friedman's "Dell Theory".
The Dell Theory says that no two countries that are part of the same global supply chain will ever fight a war as long as they're each still part of that supply chain. Now, the big test case is China and Taiwan. Both are suppliers of the main parts of computers. If they go to war, don't try to order a computer this month because you'll have a real problem.Remember though even good trends can have side effects. Yes, it is a good thing to have 2.5 billion people lifted out of poverty but as Thomas Friedman has said the earth is flat now. In the past we drove big cars and the Chinese rode bicycles. There is a finite amount of oil in the world, in the future we will all be driving small cars. Please stop what you are doing now and let us have a moment of silence for the passing of the quintessential big American car.
We can survive and prosper in this new world order, The United States is ranked as the globe's most competitive economy by the World Economic Forum, we are a free and open society and as long as we encourage the brightest young people from around the world to come here get an education and become entrepreneurs we will have more companies like Bose and Intel.
There is one fly in the ointment of our future, well actually two. Here is Obama's and Hillary's plan for America: "Renegotiate" the NAFTA trade deal with Canada and Mexico, No trade deal for our Columbian friends, keep our corporate taxes high, raise taxes on "wealthy" Americans, raise capital gains taxes and do away with secret ballots for union elections. If one of these liberal democrats is elected president all bets are off for our future. While the rest of the World moves forward the democrats want to drag us back to the past.