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“That Used to be Us:” Is Thomas Friedman’s New Book Patriotic Treacle?

November 13, 2011

I’m a long-time fan of Tom Friedman.

He’s one of the very few commentators who actually understand the dynamics and inter-connections of the economic, geo-political, social and environmental forces that are stretching economies in opposite directions.

That Used to be Us is an important book, arriving during the tumultuous Republican Presidential candidate circus, the continuing ascent of China, India, Brazil, South Korea and a long list of emerging economies, and Occupy Wall Street.

In this post I’ll share some of Friedman’s and co-author Michael Mandelbaum’s key messages and insights.

Overall this is a decent book, an easy read. However, it’s in your face when Friedman and Mandelbaum lay out the stats that serve as the foundation for a nation’s competitiveness. Perhaps it’s because of my background as a retired Canadian federal economist that I related so well to their messages. Sure it’s about the United States. But Canada’s economy is so intertwined with that of the U.S. that any Canadian who would shun the contents of this book should immediately seek psychiatric attention.

Before providing some of the main highlights I’ll state my only misgiving of That Used to be Us. It’s weak on synthesizing the solutions that are contained throughout the book. There’s no focused call to action at the end, of what should be the final chapter. Focusing the energy in this book in a tightly written and presented final chapter, replete with what needs to be done to get America back on the right path, would have given this book a powerful punch.

As it is, the reader is left to sift out the action gems and then assemble them to make the case for America’s future. The latter part of the book fizzles out, with the final two chapters, Shock Therapy and Rediscovering America, proving to be nothing short of patriotic treacle.

This unfortunate.

An oversight by Friedman and Mandelbaum? Perhaps.

Nevertheless, I’ll share some of the book’s finer moments.

The American Dream is what has held the country together during periods of darkness (eg, the Great Depression). However, now that this Dream is in question (witness Occupy Wall Street since the book’s release) many Americans are not only scared and confused but of more importance they are steadily detaching themselves from this cohesive glue.

It’s particularly instructive to look at tiny Singapore, with no natural resources (it imports sand for building construction) but yet which has an enormous desire to grow and create wealth. The United States with its vast natural resources (not to mention its 310 million people) squanders opportunities.

Friedman and Mandelbaum (F&M) astutely observe that if the U.S. is to tackle globalization and the massive changes in information technology, with the goal of maintaining its standard of living, Americans must become savers, consume less, study longer and work harder. As they state: “The more the present generation shrinks from the nation’s challenges now, the longer sacrifice is deferred, the higher will be the cost to the next generation of the decline in America’s power and America’s wealth.”

The challenges that the United States faces are different from those of past decades. F&M identify four main challenges that Americans must confront:
1. Globalization
2. Information technology revolution
3. “Out-of-control” deficits and debts
4. Energy demand and climate change

As much as Americans have been aware (and increasingly so) of these four challenges, a variety of reasons have deflected them from paying more attention. The authors spend quite a bit of time later in the book discussing the country’s polarized politics – clearly a valid reason. However, they don’t address what I would argue is a major reason for this: a hubristic attitude that has grown since the collapse of the Soviet Union, combined with an insular view of the world. That’s the polite way of saying that although the United States is now the biggest kid on the block it’s also one of the dumbest ones, with a population of 310 million people who have few clues about geo-politics, economics, their country’s history and its northern neighbor.

The core of the book centers on the authors’ Five Pillars of Prosperity. It’s here where the way forward lies, and which should have been reinforced at the end. As it is, the reader has long forgotten these pillars by the time she is reading the last two sections of Political Failure and Rediscovering America – the treacle part.

So what are the Five Pillars?

1. Public Education:
When it comes to math, reading and science, the United States is in very bad shape. The country ranks (among OECD countries) 31st in math, 17th in reading, and 23rd in science. In contrast, Canada ranks 10th, 6th and 8th, respectively.

If that’s not a national wake-up call, then all is lost for America.

Here’s another scary statistic: According to Lawrence Katz, a Harvard labor economist, “American fifty-five-year-olds are still the most educated people in their cohort in the world. But American twenty-five-year-olds are in the middle of the pack. That is a new phenomenon.”

That makes me feel warm and fuzzy, given that I recently turned 56. But it should scare the crap out of my four adult Gen Y children.

2. Building and Modernizing Infrastructure:
This encompasses, roads, highways, bridges, ports, airports, buildings and bandwidth. It has been decades since the U.S. launched a massive infrastructure program. The Interstate system, once the pride of America, is crumbling, desperately in need of tens of billions of dollars. I would ask President Obama why his flubbed Economic Stimulus scheme did not include a massive infrastructure component, such as FDR’s Civilian Conservation Corps during the Great Depression. Friedman and Mandelbaum fail to examine this.

3. Immigration:
A key ingredient to ensure that the U.S. has continued labor force growth, F&M fail to note Canada’s successful points-driven immigration system.

4. Government backed Basic Research and Development:
R&D and innovation are the backbone for a nation’s competitiveness. F&M note the role that government plays in supporting not just the growth of human knowledge but also expanding the frontiers of basic chemistry, physics and biology, and how they spawn new products and processes.

5. Regulation:
Contrary to what Republicans such as Ron Paul and Michelle Bachmann may state, regulation is essential in a functioning economy, whether it’s guarding against financial abuse, environmental degradation or protecting intellectual property. As F&M aptly assert:
“…these five pillars have made it possible for Americans to apply their individual energies, their talents, and their entrepreneurial drive to make themselves, and their country, richer and more powerful. Taken together, the five make up a uniquely American formula for prosperity, one in which the government creates the foundations for the risk-taking and innovation delivered by the private sector. This formula has made possible America’s two centuries of increases in living standards. It is what made America the world’s greatest magnet for dreamers everywhere.”

And that, folks, is the core of the book, a cogent, well-articulated, tight framework for getting the United States back on track.

Friedman and Mandelbaum have plenty of stories and anecdotes, intertwined with some astute observations. There is the correct, in my view, lamenting of the hollowing out of the country’s manufacturing sector. I agree with the authors on the vital role that manufacturing plays in any developed economy. Unfortunately, since the publication of this book a news item in October announced that the Indian government has set the goal of creating 100 million manufacturing jobs by 2025. That is staggering in its scope.

As I said at the outset, I have a lot of respect for Thomas Friedman. I regularly read his column and have seen him interviewed on TV numerous times. He’s insightful and forward thinking. I’m not, however, very familiar with Michael Mandelbaum.

That Used to be Us is still a worthwhile book to read. But I came away disappointed and lacking in what I’ll call an articulated framework and prioritized action steps for America. It’s up to the reader to glean whatever he can from the book’s contents.

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