Book review: That Used To Be US

The book “That Used To Be US” by Thomas L. Friedman, a well know journalist, and Michael Mandelbaum, a foreign policy thinker, with its sub-heading “What Went Wrong With America- And How It Can Come Back”, deals, as the title suggests, with the reality of America’s slow decline, the reasons for it, and how the country can recover its global pre-eminence.

According to the authors the post Cold War era has presented four major challenges for America: how to adapt to globalization, how to adjust to the IT revolution, how to cope with the soaring deficits stemming from the growing demands on government and how to manage a world of both rising energy consumption and rising climate threats.

Unfortunately, the authors note, US public policy has lost focus after the Cold War ended. Over the last twenty years America’s biggest problems relating to education, deficits and debt, and energy and climate change have been neglected to the point that they cannot now be addressed without collective action and collective sacrifice.

The US has stopped investing in the country’s traditional formula for greatness- immigration, education and sensible regulation. To make matters worse, the political system has become paralysed and values have got corroded. For the authors, if America is to remain a great country, it must, while reducing deficits, invest in education, infrastructure, research and development as well as open up US society widely to talented immigration and fix the regulations that govern the economy.

Globalization and the IT revolution have virtually put every American job under pressure as almost all work has become more complex and more demanding of critical-thinking skills, requiring every American to be better educated to secure a well-paying job. The challenge to America is now from low-wage, high skilled workers from across the globe. Education levels in America in mathematics and sciences have fallen badly as standardized international tests show, which has led President Obama to declare that “the country that out-educates us today will out-compete us tomorrow”. The authors refer frequently to the competitive challenge that the US now faces from China.

The world, according to them, is now even more flat than in 2005 (when Friedman’s book on The World Is Flat was published) with Facebook, twitter, cloud, 3G and Skype. In the past only governments and armies had these high-scale command and control systems, now the people do. The potential for individuals today to globalize their talents, hobbies and passions into applications with a worldwide market is unprecedented and unbounded in potential. The authors devote a full chapter to explain why the IT revolution and globalization have changed the nature of the job market, with routine workers being replaced by non-routine “creators and servers”. In time, this revolution will efface the distinction between “developed” and ‘developing” countries, with the world being divided between high-imagination-enabling and low-imagination-enabling countries, the latter  those that fail to develop their people’s creative capacities.

Rising national debt and annual deficits in the US have expanded to dangerous levels because of the habit of not raising enough money through taxes to meet federal expenditure and then borrowing trillions of dollars to bridge the gap, the authors say. For US to be able to sustain a rising standard of living, it has to play a leading role in developing new energy technologies to ward off the threat of fossile fuels to the planet’s biosphere. These two challenges -the deficit and the intersection of energy and climate have been neglected to the point that the US has been in deficit denial and climate change denial. America has been able to finance its growing budget deficits by borrowing from other countries, notably China.

The authors make a fascinating point in reminding the readers of the accident at the Three Mile Island nuclear power plant in America, the Islamic revolution in Iran, the seizure of the Grand Mosque in Mecca by Sunni extremists and the Russian invasion of Afghanistan in the same year, not to mention election of Margaret Thatcher as UK’s Prime Minister and the beginnings of economic reforms in China, all occurred in 1979. It is also in 1979 that America’s National Academy of Sciences raised its first warning about global warming. The US, however, ceased constructing nuclear power plants after the accident at the Three Mile Island- the last US nuclear plant approved in 1977 was built in 1996. In 1979 with the revolution in Iran the cost of oil skyrocketed. If before 1979 US oil addiction was undesirable, after 1979 it became geopolitically lethal, as it has transferred huge resources to those who wish America harm.

America, unlike China, has not invested heavily in wind, solar, battery and nuclear power. Clean energy will become the successor to Information Technology as the next major cutting edge technology. The US has lost its position as the leading manufacturer of solar and wind to China and Germany. The authors recommend a sound energy strategy to make America stronger, wealthier, more innovative and secure.

 The authors propose five pillars of a public-private partnership to foster economic growth: providing public education to more and more Americans, building and modernizing of the country’s infrastructure (in 2009 America’s infrastructure needed $2.2 trillion in repairs, up from $1.6 trillion in 2005), keep America’s doors to immigration open (new research indicates many immigrants have returned home to enjoy a better quality of life and career prospects), government support for basic research and development (federal funding of R&D as a fraction of GDP has declined by 60% 0ver 40 years, with 51% of US patents awarded to non-US companies in 2009) and implementation of necessary regulation on private economic activity. Unfortunately, in their eyes, the political debate in America has strayed absurdly from the virtues of the public-private formula, with Liberals blaming Wall Street and big business for all the problems and advocating a more equitable sharing of the ever shrinking economic pie, and the Conservatives believing that tax cuts will miraculously grow the pie.

American has lost the capacity for collective action because of income inequalities, with the rich not needing the benefits of such action as they can create their own “sub-society” with its own collective goods. Instead of nation building at home, America devoted itself to nation-building in Iraq and Afghanistan. The authors, who supported the Iraq war, now realize their mistake, and question the strategic benefits of the war in Libya.

In an analysis that brings to mind the present situation in India in some ways, the authors rue the political polarization in America, with the hyper-energized media environment making politics an intense form of entertainment, depicting politics more and more as a sport. The passion of everything is elevated, even the mundane, to “breaking news”. The 24 hour news channels make compromise difficult as things get leaked. Unlike in India’s case, the US has no big external enemy to enforce a sense of purpose, seriousness, and national unity.

The US has today a huge and complicated agenda and a political system incapable of addressing it at the scale and speed needed. From 1955 to 1961 voting to end a filibuster was used only once, while in 2009 and 2010 it happened 84 times. A serious disjunction exists between the American people and the government they elect, which means that representative government does not accurately represent Americans. The public esteem for government has fallen to all-time allows because of the attacks the parties make against each other. These strictures bring to mind the situation in India!

>The authors note a decline in values, a shift from long term investment and delayed gratification to short term gratification and get-it-while-you-can thinking. There is loss of confidence in the institutions, a cynical suspicion of people in authority, whether politicians or experts (reminds us of India again). In 2010 voters were angry and wanted to “throw the rascals (the politicians) out of office”. The value that America is one nation, a single community whose fate all share, is imperiled.

The authors think that rebuilding America will be a bottom-up rather than a top down effort; the thrust will come from below. Since the 1890s the US has led the world in manufacturing, only to be overtaken by China in 2010, although 11.5 million Americans produce roughly the same value of goods as 100 million Chinese workers. If the US wants to keep and expand advanced manufacturing in the country, more people should start and retain companies in America. The US should become the launching pad where innovators and entrepreneurs all over the world want to locate all or part of their operations with all the advantages of a productive work force, infrastructure, Internet band width, openness to talent, rule of law, patent protection etc.

The US, the authors believe, needs a shock therapy. In the last decade America has changed, with stubbornly high unemployment, rising federal deficit, increasing consumption of foreign oil, decline in educational standards, infrastructure in disrepair, R&D moving outside, failure to take steps to encourage high quality immigration, and national debate becoming increasing partisan. The Democrats act as if the government is the solution to all of America’s difficulties; the Republicans act as if the government is the cause of all of them. This polarization leaves no room for idelogically painful compromises that major initiatives to meet America’s challenges require. The need is for “hybrid politics”, that of the “radical centre”. A third party or independent candidate is needed to articulate this hybrid politics. Even the rise of the Tea Party movement is further evidence that the time is ripe for an independent Presidential candidacy.

Reading this book only serves to confirm the view that the business of America is business. The authors measure the country’s greatness and its capacity for recovery in terms of job creation and the ability to compete with others. It is an arid landscape in which the only yardstick of accomplishment as a society and self-satisfaction as a nation is success in the market place and being ahead of others. No wonder the authors argue that the American dream- the glue that has held together a diverse, highly competitive and often fractious society- depends on sustained, robust economic growth which now depends on the country meeting the challenges it faces, central to which is creating thriving businesses and well paying jobs.

This book is meant principally for the American audience, for ordinary Americans who might want to understand the reasons for their country’s perceived decline in an accessible and simplified manner. The copious references to movie scenes and dialogues in the book to underline a point would appeal to such a reader, though a more demanding one may feel they dilute the book’s seriousness. The book is in any case heavily marked by a journalistic style that relies extensively on quotations from a range of people to tell the story.  Such a style may be fine for newspaper reporting but not necessarily for a more serious piece of writing as a book. Tom Friedman’s writing style is by now too familiar with its stock in trade handling of issues and themes, sometimes irksome for being too glib and slick and formula-driven in presentation.

All in all, however, it is a readable, unpretentious book that sums up well the problems facing the US. The pessimism in the analysis the authors make of the reasons for the decline of the US leaves a greater impression on the reader than the optimism they exhibit in America’s capacity to overcome its problems.

Ambassador Kanwal Sibal was Foreign Secretary to the Government of India, and has served as India’s Ambassador to Turkey, Egypt, France and Russia.