Gabor Steingart, Der Spiegel's Washington D.C. correspondant, sure knows how to hurl an insult. The author of the soon to be released War for Wealth: How Globalization is Bleeding the West of Its Prosperity, has this dreadful thing to say about Americans: "They are beginning to look like Germans."
Here is the still, small, and raspy voice of someone eager to report on America's decline.
There is in fact little today that an American can be proud of, unless he happens to be one of the lucky few to have collected an annual bonus or won the Nobel Peace Prize. The only thing that has doubled in the seven years of the Bush administration is the country's military budget. By comparison, the average US family income has stagnated in the last decade or so.
A look at the US economy doesn't exactly offer grounds for optimism. The US's share of global exports has been cut in half since 1960. The balance of trade deficit has skyrocketed from about $80 billion in 1992 to a forecast $700 billion in 2007. The dollar has lost 24 percent of its value against the euro.
The Bush administration's answer to skeptics is that America is still growing at a faster rate than Europe. Consumer spending drives the economy, say politicians in Washington. But since when has consumer spending made a nation wealthy?
But of course it's all worm talk. Notice that last part: America is growing faster than Europe. The little jig about consumer spending is there to keep you from noticing the admission. Here is a less jaundiced account from Alan Dowd in The American:
Any discussion of U.S. power has to begin with its enormous economy. At $13.13 trillion, the U.S. economy represents 20 percent of global output. It’s growing faster than Britain’s, Australia’s, Germany’s, Japan’s, Canada’s, even faster than the vaunted European Union.
In fact, even when Europe cobbles together its 25 economies under the EU banner, it still falls short of U.S. GDP—and will fall further behind as the century wears on. Gerard Baker of the Times of London notes that the U.S. economy will be twice the size of Europe’s by 2021.
On the other side of the world, some see China’s booming economy as a threat to U.S. economic primacy. However, as Baker observes, the U.S. is adding “twice as much in absolute terms to global output” as China. The immense gap in per capita income—$44,244 in the U.S. versus $2,069 in China—adds further perspective to the picture.
America’s muscular economic output comes courtesy of the American worker, who is growing ever more productive. Matthew Slaughter of the National Bureau of Economic Research details in The Wall Street Journal how, beginning in 1995, U.S. worker productivity began to accelerate. “From 1996 through 2006 it doubled, to an average annual rate of 2.7 percent.”
Another recent analysis—surprisingly filed by The New York Times—notes that this technology-driven “productivity miracle” has not manifested itself in other developed economies. Citing research (PDF) by John Van Reenen and others at the London School of Economics, the Times concludes that when U.S. firms take over foreign firms, the latter enjoy “a tremendous productivity advantage over a non-American alternative…It is as if the invisible hand of the American marketplace were somehow passing along a secret handshake to these firms.” As Reenen and his colleagues conclude, it appears that the way “U.S. firms are organized or managed…enables better exploitation of IT.”
When did increasing productivity, better organization, and more efficient exploitation of information technology not make a nation wealthy? Steingart says there is little for Americans to be proud of. Just sticking to the economic facts mentioned above, Dowd points out that this economic performance was achieved despite a number of remarkable burdens.
Just consider what the U.S. economy has lost since 9/11. One estimate posited that by the end of 2003 the U.S. could have lost as much as $500 billion dollars in GDP as a result of 9/11. That’s roughly the size of the entire Iranian economy or half the Canadian economy.
As to Katrina, Congress poured $122 billion into the vast disaster area—and that was just in the 12 months immediately following the storm...
While the declinists routinely remind us that the U.S. spends more on defense than the next 15 countries combined, they seldom note that the current defense budget accounts for barely four percent of GDP—a smaller percentage than the U.S. spent on defense at any time during the Cold War. In fact, defense outlays consumed as much as 10 percent of GDP in the 1950s, and 6 percent in the 1980s.
Steingart is just a German version of Lou Dobbs. He understands that there is always a market for pessimism and paranoia, and that the human heart is always hunting for someone to blame. Steingart hopes for American decline because he cannot muster any pride in his own country. But that hope is likely to not likely to be rewarded. The U.S. would have to fall a long way before Americans come to look like this German.
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