It has become conventional wisdom in recent years that America is in decline, perhaps terminally so.
Josef Joffe, a professor at Stanford and editor of the German weekly magazine Die Zeit, turns this mindset on its head in his new book: The Myth of America's Decline.
"It's a cyclical phenomenon," Joffe says of the predictions of America's decline. But just as "declinists" were wrong about Russia in the 1950s and Japan in the 1980s, current forecasts about America playing second fiddle to China will also prove wrong, he says.
Related: U.S. Economy Will Trump China's in 2014Josef Joffe, a professor at Stanford and editor of the German weekly magazine Die Zeit, turns this mindset on its head in his new book: The Myth of America's Decline.
"It's a cyclical phenomenon," Joffe says of the predictions of America's decline. But just as "declinists" were wrong about Russia in the 1950s and Japan in the 1980s, current forecasts about America playing second fiddle to China will also prove wrong, he says.
"All the Asian dragons and tigers started out at double-digit speed, then came down like Japan to nothing, or South Korea to 4%" growth, Joffe notes. "The [export-driven] model runs out of steam" because it's based on investment at the cost of consumption, and features too much state interference leading to over-investment in certain sectors, leading to declining marginal returns, he explains.
"That is already happening to China," he adds, noting that West Germany went through a similar experience after its initial post-war boom.
In addition to overstating the power of its rivals, Joffe says America's naysayers also underestimate our attributes, most notably:
Bring Us Your Tired and Poor: Immigration has been a hot-button issue throughout America's history, yet we continue to attract and absorb millions of people from around the world. The influx of immigrants helps keep America young -- certainly younger than rivals like Japan and Russia -- and provides
"brute dynamism" to the U.S. economy that is unmatched globally, he says.
"The Europeans, Chinese and Japanese cannot handle immigration [which] yields the most precious natural resource in the 21st century economy," he says.
Johnny Can Read: Despite longstanding concerns about America's education system, the U.S. is home to 17 of the world's top 20 universities and 34 of the top 50, Joffe notes. This gives us a huge leg up in terms of attracting the world's best and brightest (see above). Joffe call the U.S. "the world's Ph.D. factory" -- as well as in R&D spending.
Related: America May Be #1 But Our Kids Are Below Average
In his book, Joffe says the biggest threat America faces is from within: If we were to "freeze up" and really limit immigration or severely restrict upward mobility, the America truly might be in decline.
As for President Obama's recent claim that America is suffering from "a dangerous and growing inequality and lack of upward mobility," Joffe is dubious.
"If it is true, then it's serious, that engine of self reinvention would slow down," he says. "But you
you can parse [the numbers] either way. The president, of course, is playing politics."
And there's nothing new about that, as with much of what Joffe says is happening in today's debate about America's outlook.
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Yes Mick I agree we are coming out of a cyclical downturn, caused by the financial meltdown in 2008. America will be okay as it always has been. Manufacturers are coming home as the outsourcing of jobs makes no economic sense in today's world with China's wages rising and shipping costs increasing. We got about 1 1/2 years to go and this will be mostly behind us. It's historically the nature of the beast.
ReplyDeleteOne of the things that I've read in various articles over the past few years is that the big advantage that the U.S. has over other developed economies is the continuing population growth/influx of youth via immigration vs other 1st world societies whose populations stagnate & age.
ReplyDeleteGood post, Doc.
Particularly interesting in this article is the rational about the reason the 'Asian Tigers' will fail in their attempt to grow.... something certain people in this country fail to recognize or credit to the demise of manufacturing and the off-shoring of our jobs; Government regulation and interference. People want to scream about how poorly the average American is doing vs corporate profits. Those profits and where they are obtained are outside the reach of our odorous US regulatory system... a system that forces everyone to absorb the expense of prevention for stupid people doing stupid things.
ReplyDeleteA government so in control of what we do and think that we spend more per pupil to educate our children than ANYWHERE in the world yet we have, since the inception of the U.S. Dept. of Education, gone from 1st to 39th in basic literacy and flat lined on internal measurements... They speak to education in the article and talk about our top rated universities but they don't talk about who actually qualifies to attend and if they are from other countries, what happens to our industries when they go back home.. like IT and engineers from India.
As far as immigration goes... there is a case to be made for intelligent immigration and their always has been. The problem now is that we are allowing 'anyone' with a pulse to establish residency in our country. People who are qualified to harvest our food and build our houses and mow our lawns. The tenancy to manual labor is diminishing and unless new immigrants can contribute to higher level jobs, they become a net drag. We, a country that fails to graduate 25 to 40% of our children from high school, already has a huge, if over paid, labor force that finds work to be much less profitable than riding social programs.
The comment about Russia and Japan are laughable… Japan has drained all of its internal wealth to stay afloat and we want to call this a success story? Russia, for a brief period of time looked like a fantastic investment opportunity and billions of investment poured into that country… alas, the only thing that Russia can produce now is oil…. Of course Russia says that their unemployment rate is 5.5%... I do wonder what kind of living 85% of those people have.