Interesting Article, please read and discuss.

[TomSimpsonAZ]

http://www.msnbc.msn.com/id/13393359/site/newsweek/


This is the sort of thing I've been thinking about more and more......anyone else?

 

[MasterBlaster]

I have thought similar things for quite a number of years.

What is it we can make that can't be made for less elsewhere ? Throw in the lack of students studying science and engineering and one can make out a very bleak future.

Then think about all of the demographic challenges that we face with all the boomers retiring

There is no guaranty of this "Holiday Inn or better" lifestyle that we have all come to expect.

Just maybe the next 20-30 years will be the great un-raveling.

 

[justin]

If we end up being "just another Britain" in another 100 years, it won't be so bad.

 

[eridanus]

I've thought about it a lot as well. The question is, will the tide lift all boats? Or is there only so much oil to spare? Ultimately, I think we westerners will have to accept a lower standard of living as the rest of the world catches up.

I noticed the author blames everything on government policies. The government is responsible for our poor savings rate?!?

 

[d]

"Our greatest danger is that when the American public does begin to get scared, they will try to shut down the very features of the country that have made it so successful." i expect this is a very real danger.

 

[Mwsinron]

Similar to the articles in the 70s and 80's about how Japan was going to be the dominate force.

 

[cute fuzzy bunny]

Definitely some points worth consideration. Do note that amongst the alarmist hand waving there are some mitigations. In many cases the cheaper outsourced labor is not as productive as equivalent american labor. In some skill sets there is parity, but in many you get exactly what you pay for.

You also need to factor in customer satisfaction. Have you really been equally well served by Bob in India as you were by Sal in Kentucky? I can honestly say that I've never gotten anything remotely close to quality service from offshore outfits, largely due to language and training limitations. Are you really enjoying your slapped together product made from inferior materials as well as the one you bought 10 years ago made from higher quality ingredients? Every major appliance I've bought in the last two years experienced some sort of moderately serious problem in its first year of service...which has not been my experience historically.

Second, these folks work cheaply at first. The lure of the iPod, BMW and expensive clothes raises its head at some point, maybe its just wanting to move the family in to the city from the country and upgrade to the next level or two of lifestyle improvement.

Third, the great civilizations of the past fell victim to one of two maladies: a nation with greater military and/or merchanting power or large groups of persistent, well organized 'barbarians'. Right now I dont see a greater power emerging and the barbarians are neither persistent or well organized.

 

[justin]

I talked to an Indian buddy for a few hours a while back on a return flight from Orlando to Raleigh. He said his friends/family still in India in the tech/software biz in his part of India are making a killing. The standard of living sounds like it is almost up to what we have in the US. Houses are unaffordable - $250,000. Everyone has a new Accord or similar car. Cell phones, IPODs, new TV's etc. Wages similar to what they are in the U.S.

My indian buddy didn't understand why companies would keep "outsourcing" anything to India if it costs just as much to do it in india.

 

[Arif]

While I don't discount the fact that China and India are catching up to the US in terms of technology. With respect to China, most of their advances are as a result of stealing US technology. So if they do pass us up who will they steal from then?
I think just as when everyone thought Japan would take over the world it helped the US greatly. Look at the improved quality of autos (no that's not a joke)and computer technology. I think the US benefits from the ideaof being knocked from its perch. It gets the competitive juices flowing and soon thereafter money starts flowing into programs that generate more efficiencies. Keep in mind that China and India for all their growth prospects, are still immature when it comes to capital markets. The experience that the US has gained over the last 200+ years does not happen over night.
Now if we help China and India to become more efficient and prosperous then they will have a short cut to compete and possible beat the US. I am not so sure that a growing India and China are a bad thing (excluding military might). More people around the world will be able to afford our goods as they prosper (unless they blow us up first).

 

[donheff]

Zakaria may be right about the value of a little fear and paranoia to spur discipline. But like many others he views the global economy as a zero sum game - if others succeed, then we must be falling behind. Not necessarily so. As former third world countries become increasingly wealthy they also become increasingly valuable markets.

I think he is right about the value of immigration to America. Our genious (or historical luck) is that we actually integrate most of our immigrabts into the fabric of our society. They become Americans - certainly by the second or third generation. Europe has miserably failed in that regard and is paying the price.

 

[haha]

While I don't discount the fact that China and India are catching up to the US in terms of technology. With respect to China, most of their advances are as a result of stealing US technology. So if they do pass us up who will they steal from then?

Thousands of years of Chinese history have proven that they are quite capable of inventing things themselves. Possibly they don't see the need right now; possibly it will take a while to get up to speed. But they will.


Ha

 

[Mwsinron]

Thousands of years of Chinese history have proven that they are quite capable of inventing things themselves. Possibly they don't see the need right now; possibly it will take a while to get up to speed. But they will.


Ha

Good point. However the evil seeds of capitalism will slowly seep into their country. As we know capitalism breeds individualism and we will see how that plays out in China. Fun times ahead!

 

[mb]

I think that there is another threat equal to those discussed in the article.

In The Rise and Fall of the Great Powers, Paul Kennedy IMHO convincingly argues that "Great Powers" become great by growing their economy faster than competitors BUT that they fall by over extending themselves militarily.

Sound familar?

MB

 

[Delawaredave]

Excellent article - thanks for posting.

The beginning of Bernstein's 4 Pillars talks about the last 300 years - how we had the "American Century", before that, the UK ruled the economic world, before that France, and before that China.

The "sun" on each country rose, shined, and then set - with different reasons for the "passing of the economic baton" (military might, innovation, etc).

The "American Century" could be over.   Or it could  go on for 20 years.

My investments are heavily diversified internationally.   I just can't believe that the US can continue with 5% of the world's population consuming over 20% of the world energy and have 50% of the worlds market capitalization.

But who knows....

 

[Austin_Explorer]

While I don't discount the fact that China and India are catching up to the US in terms of technology. With respect to China, most of their advances are as a result of stealing US technology. So if they do pass us up who will they steal from then?

The same thing was said of Japan a few decades back. They made cheap crap that was a poor knockoff of American goods. When they finally reached the quality and innovation level of the US they didn't stagnate because of there was no source of originals to copy, they became the originators and kept improving. Now many American firms are doing what the Japanese used to do, make cheap crappy knockoffs of someone else's stuff.

Korean auto makers are using the same improvement program. Their cars used to be bad, but they are getting much better.

A country has to walk before it can run.

 

[cute fuzzy bunny]

I think that there is another threat equal to those discussed in the article.

In The Rise and Fall of the Great Powers, Paul Kennedy IMHO convincingly argues that "Great Powers" become great by growing their economy faster than competitors BUT that they fall by over extending themselves militarily.

Sound familar?

MB

Seems to me that most "great powers" became great by extending their empires militarily and reaped the economic benefits of colonization, reduced piracy of their merchant fleets, and the resulting commerce. Agreed that many screwed up by overextending themselves.

Its also plausible to draw a direct correlation between increases in liberalism and the fall of many of the great societies, but I dont know if theres a correlation or causation involved with that.

A fairly interesting article to consider, although its a few years old...

http://www.opinionjournal.com/editorial/feature.html?id=110005244

 

[HFWR]

The spirit was freedom and justice
And it's keepers seem generous and kind
It's leaders were supposed to serve the country
But now they won't pay it no mind
'Cause the people grew fat and got lazy
And now their vote is a meaningless joke
They babble about law and order
But it's all just an echo of what they've been told
Yeah, there's a monster on the loose
It's got our heads into a noose
And it just sits there watchin'

Our cities have turned into jungles
And corruption is stranglin' the land
The police force is watching the people
And the people just can't understand
We don't know how to mind our own business
'Cause the whole worlds got to be just like us
Now we are fighting a war over there
No matter who's the winner
We can't pay the cost
'Cause there's a monster on the loose
It's got our heads into a noose
And it just sits there watching

John Kay, Jerry Edmonton, 1970 (Steppenwolf)