POLITICS
Worn in the
USA
Many ordinary Americans are finding it hard
to survive, and their economy is under threat from China and India.
But as long as money dominates the political system, can anything
really change?
DENIS STAUNTON
Time to Start Thinking: America and the
Spectre of Decline
By Edward Luce
Little Brown, 292pp, £20
MARK AND CONNIE FREEMAN both work full time at Park Nicoller
Methodist Hospital, in a suburb of Minneapolis. He is a warehouse
packager and she is an an anaesthesia supply technician. Mark works
part time in a liquor store to supplement the family income, which
fell from $70,000 to $50,000 in the space of a year after he lost
another part-time job. The Freemans are still paying their mortgage
on a home that is now almost worthless, and with just $70,000 in
savings, they calculate, they will never be able to retire. They
worry about staying healthy enough to keep working and about the
catastrophic financial impact of any future medical crisis and fret
constantly about the future of their 22-year-old autistic son,
Andy.
The Freemans are far from exceptional. As Edward Luce
notes in this lively and insightful study of the condition of the
United States, their situation is “disturbingly normal” in a
society where those on low and middle incomes have paid the biggest
price for the loss of national competitiveness. The middle class
(which in the United States includes the working class) is getting
poorer and more insecure every year while the richest Americans
capture an ever bigger share of the nation’s wealth. In the last
full business cycle, between 2002 and 2007, the top 1 per cent of
Americans captured almost two-thirds of all economic growth, and
the top 0.1 per cent took more than a third. During the same
period, the median American household saw its income decline by
$2,000.
Luce, who is chief Washington correspondent of the
Financial Times, identifies the condition of the United States’
middle class as the truest measure of its economy and the ultimate
gauge of the strength of its democracy. It is also the most painful
symptom of the United States’ relative decline, which has seen its
share of the global economy tumble from more than 30 per cent in
2000 to 23.5 per cent a decade later. Time to Start Thinking
combines extensive reporting from throughout the US, including
interviews with CEOs, senior military officers, academics,
scientific innovators and working Americans, with an unsparing
analysis of the country’s approach to education, innovation,
immigration and government. It draws its title from the remark
attributed to the physicist Ernest Rutherford when he took over the
Cavendish Laboratory, in Cambridge, after the first World War:
“Gentlemen, we have run out of money. It’s time to start
thinking.”
Luce finds plenty of fresh thinking, from the officers at
the National Defense University who argue for big cuts in military
spending and the ceding or sharing of domination over large parts
of the world, to the campaign of Dean Kamen, inventor of the
Segway, to make maths and science attractive to US teenagers.
Unfortunately, very little of it comes from Washington
policymakers, most of whom remain trapped in an orthodoxy that puts
its faith in free trade, low taxes, light regulation and a modest
or shrinking state. The US is losing its economic struggle with
China, which is set to overtake the US economy by 2020, according
to the latest projections. But General Electric’s CEO, Jeff Immelt,
complains that anyone suggesting that the government should take a
leading role in helping the country’s private sector to compete
will get short shrift in Washington.
“It is okay not to believe in industrial policy when you
are the only player on the world stage,” he said. “But when your
biggest competitor is China then you are confronted with industrial
policy on steroids . . . Should you continue in the belief that
industrial policy is only for the weak?”
Luce is reminded of the debate in Britain around 1900
when that country’s elites realised it was being outpaced by the US
and Germany. Instead of questioning its long-standing commitment to
free trade or copying Germany’s vocational education system to
boost skills in science and engineering, Britain launched into a
round of budget cutting that did nothing to slow its decline.
American optimists have two stock responses to those who
argue that the country is in decline. One is to recall the
“Japanic” of the early 1990s, when many analysts predicted that
Japan’s mix of economic planning, hard-working and thrifty
citizens, dedicated students and competitive exporters was set to
ensure a sustained economic surge at the expense of the United
States. After two decades of economic slump in Japan, few Americans
fear Tokyo, and the optimists point to the weaknesses in China’s
economic and political system that could trip up that emerging
giant on its way to eating the United States’ lunch.
The second argument is that, despite its faults, the US
remains the most innovative economy in the world, home to the top
universities and the best scientists. It leads the world in
software, biosciences, social media and computer-chip technology,
and everyone agrees that companies such as Google and Facebook
could emerge and thrive only in the US. Here too, however, it may
be in danger of losing its competitive edge, not least because many
of the scientists and engineers who come to the US to study are
choosing to go home after they qualify rather than make a career in
the United States. This is partly because of the restrictive
immigration policies introduced after 9/11 but also because pay and
prospects in countries such as India and China are starting to
match or even beat those in the US. Meanwhile, a more cautious
generation of venture capitalists is reluctant to take a risk on
start-ups that have yet to prove themselves, slowing the path to
market for today’s innovators.
If the decline of the US is a cause for concern, the
failure of its politicians and policymakers to respond to the
change in their country’s fortunes is more worrying still. Luce
describes a political system that is so determined by money that
senators and congressmen spend most of their spare hours attending
campaign fundraisers or “dialling for dollars” to ensure that they
have enough cash to frighten off potential primary challengers.
Among voters, Luce sees a deadly combination of apathy and
fanaticism, with the fanatics best placed to shape policy – or at
least to block the measures necessary to revive US fortunes.
Barack Obama has shown little inclination as president to
embrace radical change, and special interests have been at least as
influential in the White House during his tenure as under his
predecessors. His challenger in November, Mitt Romney, promises to
double down on the economic policies that have helped to accelerate
US decline, and both candidates remain wedded to the increasingly
improbable rhetoric of American exceptionalism. Both Obama and
Romney would do better to heed the lessons of Luce’s book, which
should be essential reading for anyone who cares about the fate of
the US and its consequences for the rest of us.
Denis Staunton is Deputy Editor. He was Washington correspondent
from 2005 to 2009
Arts and Books,The Irish Times, Weekend Review, Saturday, 26 May
2012, Pg 10
Link : http://www.irishtimes.com/newspaper/weekend/2012/0526/1224316691654.html