May 162012

Are America’s best days in the rear-view mirror?

The Economist‘s Lexington columnist reminds us (May 12, 2012, print edition) that bouts of what it labels “declinism” are, well, almost as American as apple pie.

It wasn’t so long ago that Japan was buying up iconic U.S. real estate (New York office towers, California golf resorts). I remember an issue of Forbes with this line inside: Set this magazine down anywhere in downtown Tokyo, and the real estate under it is worth $1 million.

Bookshelves groaned at the time (the late 1980s) with tomes on how Japan had overtaken the U.S. and would rule the world.

We know how that turned out. Japan has been in its own version of the Great Recession for more than 20 years. Its economy is shrinking, its population aging. It has twice as much debt in relation to the size of its economy as the U.S.

We’re in the midst of another bout of declinism, and no surprise, says Lexington, following “China’s rise, two grinding wars and the deep recession of 2008.” But don’t be too quick to write America off. Lexington’s take:

Yet anyone who prefers their glass half-full can find grounds for optimism. The first Boeing 787 Dreamliner has just landed in Washington, DC. It will be decades before China can make such a machine. The IMF is predicting average growth of over 2% for 2012 and 2013, not meteoric but not bad for a mature economy. America has a young workforce, with plenty of skilled people knocking at the door to come in. It still has more of the world’s best universities than any other country. It is the world’s largest producer of natural gas and its biggest food exporter. Amid the gloom, the economy is getting “Better, Stronger, Faster”, argues Daniel Gross, in a [new] book …

We might add that China, now in ascent as an economic and military power, has its own intractable demographic problems, to say nothing of the fact that its decrepit political system has failed to keep pace with its economic development.

Sure, we Americans have problems aplenty. My laundry list would start with income inequality, dysfunctional politics, cynicism about government, unsustainable Federal deficits and slow growth. But we should not miss the forest for the trees.

I leave the last word to the Lexington columnist:

Charles Dickens said of the United States that if its citizens were to be believed America “always is depressed, and always is stagnated, and always is at an alarming crisis, and never was otherwise.” On a variety of objective measures, it is in an awful mess right now. And yet America of all countries still has plenty of grounds to hope for a better future, despite its underperforming politics, and no matter who triumphs in November.


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