Euphoria and overreach that propelled
America’s downturn

Sorely, it is so akin to India today?

By Sarthak Shankar 

That Used to be Us: What Went Wrong with America—and How It Can Come Back, Thomas L Friedman and Michael Mandelbaum, Hachette India, pp 400 (HB), Rs 599?

America used to be a country that inspired romance of utopian dreams. But since the 2008 meltdown it has become the fodder for ridicule. In the world where everybody is into analysing everything Friedman and Mandelbaum in their book, That Used to be Us shed spotlight on the subject that everyone’s talking about.

The volume starts off with a brief trip to China. Friedman recalls going to the Taijin Meijin Convention and Exhibition Centre which he describes as “a massive beautifully appointed structure, the like of which exists in a few American cities.” He was baffled when he found out that it was built ground up in 32 weeks — while a minor repair in a escalator of a metro station had been pending for over 24 weeks in his hometown in USA. The authors try to compare China’s remarkable growth and America’s unexpected stagnation. The former is ubiquitously discussed in homes and offices world over. The latter is the elephant in the room no one wants to see. 

America had always been in the forefront of something big. For generations, leaders and patriots kept on updating the American formula for success which was composed of five key ingredients namely education, infrastructure, immigration, R & D and regulation. But since the end of the cold war the country seems to have gone lax, as if it had no enemies left or no goals to conquer. It was as if the Americans had fooled themselves into believing that they had obviated the need to keep their formula in sync with the times. The authors say this couldn’t be farther from the truth. Because the world changed.

The advent of globalisation and internet made the world flat. Distances, in effect, vanished. Actual physical location didn’t matter anymore, as a student in China found a seat in an Ivy League University just a few clicks away—the actual miles of separation was of no significance at all. “These same people in these same places discovered that they were being touched by people who had never touched them before — whether it was a young Indian voice on the phone from a Bangalore call centre trying to sign them up for a new Visa card or a young Chinese student in Shanghai who had just taken the place they had hoped to have at Harvard.”

Thus the end of cold war coupled with globalisation and internet spelt chaos for the unresponsive America. The US had traversed into unchartered territory with an outdated map and a slow horse. Friedman and Mandelbaum explain that the cold war was a milestone but not the end of the road. The 21st century brought four new challenges which were “how to adapt to globalization, how to adjust to the information technology revolution, how to cope with the large and soaring budget deficit stemming from the growing demands on government at every level, and how to manage a world of both energy consumption and rising climate threats.” The authors spell out the need to prepare Americans to face the 21st century. Gone are the days when education was an option and a job could be broken down to a repetitive exercise. The growth in IT has started making non-specialised, routine jobs vanish. The authors tell us that there are mainly two types of jobs in the future: non-routine high skill jobs and non-routine low skilled jobs. They believe that if you belong to the former category then “globalization and IT have been your friends, making you individually more productive, globally more attractive, and most likely better paid.”

Non-routine low skilled jobs “will always exist, but how many such jobs there are and how much they pay will depend on the overall state of the economy and local supply and demand.” Non-routine jobs refer to jobs whose work can’t be broken down to some algorithms and fed to a computer / robot. So a person’s uniqueness and irreplaceability is his / her only guarantee for a secured job.  

Friedman and Mandelbaum are emphatic that education is an area where Americans lack — sorely — with respect to the global average. The authors don’t mince words and cite the findings of OECD PISA (programme for international student assessment) which measures a country’s youth’s performance in three critical areas namely mathematics, reading and science. It ranked American students as just about average. Even though the achievement level of blacks and Hispanics has gone up, the national average is nothing to boast about. On the other hand China distinguished itself by topping the charts in all three areas of the test.

The authors believe the only way to correct these figures is to build a cohesive plan that incorporates the efforts of teachers, principals, parents and, of course students. Over and above this, structural changes that promote creativity, and risk-taking ability need to be made a part of the curriculum.  

Friedman and Mandelbaum analyse mistakes the American society made. “Americans decided to act as if we had a divine right everything—low energy prices and big cars, higher spending and lower taxes, home ownership and health care, booms without ceilings and busts without massive unemployment — all at a time when the country was waging wars in Afghanistan, Iraq, and then Libya.” Another sin which America is guilty of is its negligence toward use of sustainable energy. A field that America had beaten everyone else, has became an albatross around its neck. The United States had been overtaken in the field of sustainable energy by China – particularly in the field of nuclear energy. The constant lobbying by the corporate prevented the setting up of a carbon tax. Friedman and Mandelbaum also point out that the Americans’ oil dependency is what ultimately led the funding of Islamic extremists who went on to become Al Qaeda. Thus they correctly say that America is in effect fighting a war it funded from both sides. 

The authors then highlight another failure on America’s part: the political scenario. Earlier, Democrats and Republicans were not as polarised as they are now. More often than not they had respect for each other’s opinion and would be open to negotiation. This was mainly due to the presence of diverse groups within the parties that ensured a centrist approach by each group. As the diversity crumbled the parties became so intransigent that they neglected the need for collective action the country was asking them of. The corporate didn’t help, by responding to even the mildest of criticism by cutting off political donation. In essence the big corporate had bribed everybody in the government to do their bidding. And the media fanned the flames by using their influence to spread half truths and at times rumours which brought on unnecessary pressure on the politicians. Incessant lobbying was also a root cause for the Wall Street jack up. Tools like derivatives were kept away from the courts’ radar by the lobbyists who kept pressing their issues before national interest. Thus the only system of regulation that could buffer the American economy against the whims of the market was weakened till breaking point. The dangerous trend continued, expert opinion was disregarded and authority was challenged till all ties with reality were severed. “Senator James Inhofe …. called global warming the “ greatest hoax ever perpetrated on the American people.”
The book concludes on an optimistic note, though, by citing stories of Americans who “just didn’t get the word.” These are people oblivious to the meltdown and just keep carrying on with their ideas in the hope of making a difference. Notable among these are an e-waste management mechanism that could help save the environment and reduce cost of manufacturing plastic to a fraction and a car that runs purely on electricity, to name a few.

The solution to America’s political scenario as seen by the authors is “shock therapy.” They believe that the methods advocated by the Republican and Democratic parties are wrong or incomplete. The best solution would be to introduce a third alternative i.e. an independent candidate who would offer a complete picture of the economy and promise to implement policies that need to be implemented. He would, in effect force the Democrats and Republicans to respond to the right stimulus. Thus both parties, that would go to extraordinary lengths to secure votes would be too willing to listen and respond. The authors cite various instances in American history wherein the presence of an independent candidate changed the focus of the elections for the better. Even two-time president Theodore Roosevelt had contested with a third party, as he felt  that his replacement in the Republican party had done too little to carry forward his vision of America’s future.

Disclaimer: The chances of the third party actually being elected are slim, but if the goal is to bring effective governance then a third party is by far the best bet.
Highly penetrating and extremely reader friendly this book is an absolute must for anyone interested in the world economic scenario. Whether you are an expert on the subject or clueless about, it this book is sure to leave your mind buzzing for hours.    

Thomas L Friedman is a three time recipient of the Pulitzer Prize for his work with The New York Times and is the author of five bestsellers including The World is Flat. Michael Mandelbaum is a professor and author.

(Hachette India, 612/614 (6th floor), Time Tower, MG Road, Sector 28, Gurgaon-122 001)?