newjerseynewsroom.com

BY GERALD J. ROBINSON

NEWJERSEYNEWSROOM.COM

COMMENTARY

There's a great deal of handwringing about the future of the United States as the world's largest economy and its world leadership. Many believe the remarkable growth of China and the anemic recovery of the U.S. from the Great Recession are harbingers of our decline in coming years to second class status. Pundits dourly claim that history shows the inevitability of the fall of great superpowers, from the Roman Empire to the British.

Don't believe it.

We've heard these dire predictions before. The rise of Japan in the 1980s caused many pundits to predict that the Japanese would soon come to dominate the world economy. It didn't happen. Indeed, the Japanese economy went into a 15-year slump.

America brings unique advantages to the changing world order created by globalization. These include the head start of having the largest and most competitive economy in the world, technological pre-eminence, a flexible labor system, a growing population, an entrepreneurial culture, highly profitable world class corporations, top universities, high productivity and competitiveness.

But we have plenty of serious problems. They include a deeply flawed K through 12 educational system, high and continuing unemployment, a squeezed and shrinking middle class, large structural deficits and ballooning national debt, low growth, a shrunken manufacturing sector, an overstretched military, persistent trade deficits, heavy indebtedness to foreigners, especially China, and a nearly frozen political system. But even with all these problems and others, it's unlikely we will lose out premier status any time soon. We're simply too big and too strong for that.

Yes, with the continuing growth produced by globalization we're likely to see more challenges and greater assertiveness from rising nations — even something as unsettling as the recent challenge to the status of the dollar as the world's reserve currency. With the diffusion of power that accompanies the strengthening of the economies of other nations, the ability of the United States to act unilaterally and independently will diminish. As the power of other major players rises we will need to form coalitions with them to implement policies that both they and we can support. We can remain the most influential player, but geopolitics will become a team sport.

What we face is a relative decline, not an absolute decline. This means that as the gross domestic products of other nations like China and India rise and other regions like Western Europe and South America become more prosperous, our share of the world gross domestic product will decline. But even while this is happening, we will remain the biggest player with a growing GDP.

This view is supported by the insightful and eminently readable analysis by the commentator and geo-political analyst Fareed Zakaria in his book, "The Post-American World." In his view, the most likely scenario is that the size of the world GDP pie will enlarge in coming years with the slices of most nations, including the United States, becoming larger. So even if with the "rise of the rest" the United Sates is in relative decline, we will continue to grow larger and stronger.

This optimistic scenario where all nations benefit assumes that we can unfreeze our political system so that we can deal with critical problems, especially the under-achieving educational system and the deficit-linked soaring national debt.

We can do it.

Just this month some promising political signs emerged. A Presidentially authorized Deficit Reduction Report was recently released and is scheduled to get serious consideration when Congress reconvenes in January. A "lame duck" session of Congress just produced a surprising and significant collection of bi-partisan legislation, as patriotism at least temporarily triumphed over the corrosive influence of a horde of lobbyists. It passed a compromise tax bill, repeal of don't ask, don't tell, ratified the Start treaty and passed funding for medical care for 9/11 first responders. There's even a newly formed grass roots organization called "No Labels" devoted to promoting nonpartisan and pragmatic solutions to the nation's problems.

Our national new year's resolution should be to urge our political leaders to grapple seriously, persistently and intelligently with the challenges that confront us and to do so in a manner that sensibly balances self-interest with patriotism and seeks practical solutions, not political victories. We need to keep in touch with political leaders to constantly remind them that this is what we expect, what we demand. If we succeed in this, America will long continue to be the leading player in the global "rise of the rest."

Happy New Year!

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