Thomas Friedman and Michael Mandelbaum the Decline (and Potential Comeback) of the U.S.

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Welcome to Politics Bites, where every afternoon at It's A Free Country, we bring you the unmissable quotes from the morning's political conversations on WNYC. Today on the Brian Lehrer Show, three-time Pulitzer Prize winning author and New York Times columnist Thomas L. Friedman and director of American Foreign Policy at The Johns Hopkins University School of Advanced International Studies Michael Mandelbaum discuss their new book, That Used To Be Us: How America Fell Behind in the World It Invented and How We Can Come Back.

Nearly ten years after Jerry Falwell blamed the 9/11 terrorists attacks on “abortionists” and feminists and gays and the ACLU, Michele Bachmann suggested, with a wink, that the recent earthquake and hurricane Irene might also be retribution for the copious sinning going on here on the east coast.

These views are, to say the least, extreme, but it is true that there is a growing concern that these might be the end days of American prominence on the global stage. While these end days are attributed less to the wrath of any one person’s interpretation of religion and more to policy and economic disasters, Thomas Friedman and Michael Mandelbaum say that this does not need to be the end of the American Dream. This time of decline should, instead, serve as the American Wake-up.

Federal Reserve Chairman Ben Bernanke said in a recent policy speech in Wyoming that “the growth fundamentals of the United States do not appear to have been permanently altered by the shocks of the past four years.” Yet Friedman quotes the dean of the public policy school at the National University of Singapore today in the New York Times, saying nearly the opposite. Dean Kishore Mahbubani says that this is not a normal recession, and recovery is not around the corner. Instead, he says, sacrifice will be needed in the post-American century world.    

Friedman said he and Mandelbaum were driven to write the book because of the specter of permanent decline.

The notion that every generation will pass on to the next a higher standard of living is now in play, and that won’t just affect America, because the American dream is so essential to America’s ability to project power into the world to be a stabilizing force and to be a model of Democratic capitalism that other countries will want to follow. We wrote this book because neither of us wants to be on duty when the American dream goes dark.

Mandelbaum sees economic and foreign policy as interlocked.

Our conversations about foreign policy always ended up with domestic policy and with the challenges that the United States is not facing, let alone mastering. And we concluded that the most important foreign policy today is domestic policy.

The United States used to be ascendant largely due to a formula for success—one that it has since moved away from, said Friedman.

Those parts are investing in education so we ensure that we have a population that is capable of mastering whatever is the technology of the day…second, building infrastructure so we have the worlds best roads, airports, bandwidths…third is keeping our country open to the world’s most energetic and talented immigrants… fourth is having the right rules to incentivize investment and risk-taking but prevent recklessness.  And lastly it’s government-funded research to push out the boundaries of knowledge.

The authors argue that the way back to that formula is through what they call “hybrid politics”—a mix of spending cuts, raising taxes, and investment in those five areas. Mandelbaum said sacrifice will be a part of the effort, not just by the wealthy but by all. Also important will be unity behind a plan to recovery. Friedman said manufacturing will play a role as well. Until last year the United States was the world’s largest manufacturing nation in terms of value of products produced overtaken by China only this year.

So actually we are not out of manufacturing.  What we are out of is low-end manufacturing. But in terms of producing high-end value added products, we are right there with China.

The difference, he says, is China produces the same amount of goods with about 100 million people that the United States does with 11 million people, and he said that will likely not change. 

Mandelbaum agreed, saying that equal production with one-tenth as many workers means that the United States can afford to pay ten times the wages. He said the same numbers of manufacturing jobs can be sustained if more investment is made in research and invention. Still, he believes the shift to service jobs in inevitable, and those jobs are easily endangered by what he refers to as “cheap genius”—innovation and outsourcing abroad. In order to keep these jobs everyone must bring something extra, he says, which reaffirms the need for increased attention to education. 

Friedman said the long historical view is the real question.

It really comes down to, will our decline be relative, as we are rising but other countries are rising as well, and maybe faster and catching up.. Or will it be absolute decline, will we literally be falling back? We really think that is what is in play now.

Financial centers like Hong Kong and Singapore are getting ahead, but Friedman said that advancement is not due to any one policy.

It’s because they’re starting every day by asking one question: What world are we living in? What world are we living in and what are the biggest trends in this world? How are we starting our day? Well, way too often at the political level, we’re starting our day with one political party or another saying how do I take this crowbar and put it in the wheel of the other party?