Ever since the eruption of the financial crisis in 2008, western historians, economists, journalists − in short, the chattering classes − have asked themselves whether America is on the decline, and if so, why? Financial Times columnist Ed Luce now adds his voice to the debate in a powerful new book, entitled Time to Start Thinking.
“The old model died in the rubble of Lehman Brothers”, he writes. “The new has yet to be born. Many still believe that the corpse can be revived.” Luce writes that, for Americans, it is time to start thinking pragmatically about the country’s huge challenges. Not surprisingly, the book starts with a journey into the heartland of America’s shrinking and shaken middle class. Luce’s economic analysis echoes that of Nobel Prize winning economist Michael Spence, who has argued that America is mired in a deep structural crisis. Spence’s argument rests on a number of core points, one of which is that America’s job growth in the past few decades has mainly come from the non-tradable service sector, such as health care. Journalist Ed Luce adds that despite Obama’s timid health care reform, its cost curve will not be bent. In fact, exorbitant health care costs will continue to be a drag on the wider economy.
Luce also blames the public opinion’s obsessive finger pointing at the political class in Washington for distorting the debate the country should be having. “Blaming politicians has turned into a lazy perennial of modern American life,” writes Luce. “Even the politicians blame the politicians — bashing Washington is one of America’s few bipartisan talking points.” According to Luce, Washington has become an easy excuse for inaction. In his view, political gridlock is a symptom, rather than the root cause for America’s ills.
At the other end of the spectrum, historian Robert Kagan is trying to push back. Self- flagellation has never been his forte, and he urges Americans not to indulge in it. Believing in traditional American self-confidence, his message for U.S. citizens is to stop whining, get up, dust off and face their challenges. Decline is a possibility, he reminds his audience, but certainly not unavoidable. Tellingly, and as a patriotic reminder for his readers, he chose “The World America Made” as the title for his new book. Wary of being labeled as soft, U.S. politicians on both sides of the political spectrum have embraced Kagan’s view. In his State of the Union address earlier this year, President Barack Obama stated: “Anybody who tells that America is in decline or that our influence has waned, doesn’t know what they are talking about.” The line predictably drew applause from both sides of the isle.
This attitude has a built in risk. If the gap between high flying rhetoric and the rough reality is too wide, words will sound hollow. European politicians and corporate leaders visiting the U.S. often express a mixture of surprise, concern, and sometimes irritation, when faced with the usual round of verbal Europe bashing. Not surprisingly, while grudgingly admitting that Europe is not in a good place, they feel compelled to remind Americans of their own shortcomings. Many ask themselves if U.S. representatives are just trying to deflect attention from their own problems, or whether they are genuinely convinced that the U.S. is better equipped to face today’s challenges. Whatever the case, Europeans often fly back home convinced that there is enough to be worried about.