The threats and promises of globalization

I wrote a post on global shortages of commodities yesterday, concluding that global competition for resources meant that Americans might have just experienced their all-time peak in standard of living. In a world with rising prices and declining availability of key resources, we can expect our purchasing power to shrink, and then our access to consumer goods to follow suit. In a Newsweek article today, Fareed Zakaria talks about the same sort of thing: the now-routine challenges to America’s supremacy:

…for the first time in living memory—the United States does not seem to be leading the charge. Americans see that a new world is coming into being, but fear it is one being shaped in distant lands and by foreign people.

Look around. The world’s tallest building is in Taipei, and will soon be in Dubai. Its largest publicly traded company is in Beijing. Its biggest refinery is being constructed in India. Its largest passenger airplane is built in Europe. The largest investment fund on the planet is in Abu Dhabi; the biggest movie industry is Bollywood, not Hollywood. Once quintessentially American icons have been usurped by the natives. The largest Ferris wheel is in Singapore. The largest casino is in Macao, which overtook Las Vegas in gambling revenues last year. America no longer dominates even its favorite sport, shopping. The Mall of America in Minnesota once boasted that it was the largest shopping mall in the world. Today it wouldn’t make the top ten. In the most recent rankings, only two of the world’s ten richest people are American. These lists are arbitrary and a bit silly, but consider that only ten years ago, the United States would have serenely topped almost every one of these categories.

He goes on to show how foreign economic and financial centers are superseding those of the United States, making us less and less important to world affairs. He has a rosy outlook on our future, though:

America has benefited massively from these trends. It has enjoyed unusually robust growth, low unemployment and inflation, and received hundreds of billions of dollars in investment. These are not signs of economic collapse. Its companies have entered new countries and industries with great success, using global supply chains and technology to stay in the vanguard of efficiency. U.S. exports and manufacturing have actually held their ground and services have boomed.

The United States is currently ranked as the globe’s most competitive economy by the World Economic Forum. It remains dominant in many industries of the future like nanotechnology, biotechnology, and dozens of smaller high-tech fields. Its universities are the finest in the world, making up 8 of the top ten and 37 of the top fifty, according to a prominent ranking produced by Shanghai Jiao Tong University.

But I think the mere fact that our universities are now being ranked by a Chinese university shows how much the world is changing and leaving us behind. I hold to the alternate view of the future, the view that Zakaria pooh-poohs:

Many look at the vitality of this emerging world and conclude that the United States has had its day. “Globalization is striking back,” Gabor Steingart, an editor at Germany’s leading news magazine, Der Spiegel, writes in a best-selling book. As others prosper, he argues, the United States has lost key industries, its people have stopped saving money, and its government has become increasingly indebted to Asian central banks. The current financial crisis has only given greater force to such fears.

Zakaria closes his pollyanna article with a plea for the US to join wholeheartedly in the global market:

Americans—particularly the American government—have not really understood the rise of the rest. This is one of the most thrilling stories in history. Billions of people are escaping from abject poverty. The world will be enriched and ennobled as they become consumers, producers, inventors, thinkers, dreamers, and doers. This is all happening because of American ideas and actions. For 60 years, the United States has pushed countries to open their markets, free up their politics, and embrace trade and technology. American diplomats, businessmen, and intellectuals have urged people in distant lands to be unafraid of change, to join the advanced world, to learn the secrets of our success. Yet just as they are beginning to do so, we are losing faith in such ideas. We have become suspicious of trade, openness, immigration, and investment because now it’s not Americans going abroad but foreigners coming to America. Just as the world is opening up, we are closing down.

Generations from now, when historians write about these times, they might note that by the turn of the 21st century, the United States had succeeded in its great, historical mission—globalizing the world. We don’t want them to write that along the way, we forgot to globalize ourselves.

I don’t have any problem with joining the global market – I just don’t believe Zakaria’s assumption that it will cure all our ills. In fact, we have no choice but to join the market, just as we have no choice but to accept a future where our share of the world’s oil supply will become smaller and smaller. Will that world really be better for Americans?

In the end, Zakaria’s article is smoke and mirrors – it describes the problem well, but his solution is a fantasy in which we all join hands and sing “We are the World.” “Just Globalize,” he says, without accounting for the growing shortage of go-juice for all those expanding economies. Tell you what, Mr. Zakaria – you get oil prices back down to $20/barrel and we’ll globalize like the dickens. In the meantime, it’d probably be best if you put the globalization pom-poms down.

The Minneapolis Star Tribune is Tanking

The boys at Power Line must be chortling:

The Minneapolis Star Tribune, reeling under a heavy debt load and plummeting advertising sales, is on the brink of bankruptcy, The Post has learned.

One of the nation’s top dailies, “The Strib,” as it is known to readers in the Twin Cities, recently hired the Wall Street powerhouse Blackstone Group to restructure its balance sheet after failing to meet its debt obligations, according to people familiar with the company.

The broadsheet is unlikely to shutter its doors, but its creditors, including the banking giant Credit Suisse Group, figure to eventually end up controlling the paper.

They (the Power Line team) have been battling the chicanery at The Strib for years, just as Patterico has been taking on the LA Times. Their biggest foil was always Nick Coleman, who they summed up as follows:

Nick Coleman is a third-rate columnist for a second-rate newspaper. He wields his Star Tribune metro column like a hatchet, performing acts of destruction that seem to fulfill some dark needs. Coleman’s column illustrates how a newspaper such as the Star Tribune can become a corrosive force on the civic life of the community it serves.

Papers like the NYT and The Strib have suffered from journalistic hubris, poor reporting standards, and a strong liberal bias that appears throughout their papers. They’ve held on to, and defended, hacks like Nick Coleman who butcher logic and truth, and they’ve stiff-armed critics, preferring to brush off criticisms rather than correcting their faults. As a result, their circulation is declining and their companies are suffering financially.

Now that’s “chickens coming home to roost.”