Zakaria's Optimism

Fareed Zakaria is everywhere these days, articulating a message similar to mine in The End of the American Century. But I think he underestimates the seriousness of the situation facing the United States.

Zakaria had the lead article last summer in Foreign Affairs’ issue on “Is America in Decline?” His book The Post-American World appeared shortly thereafter, and soon became a best seller. As an editor of Newsweek, his columns appear there regularly, and the October 20th issue of the magazine featured him on the front cover, with the title “The Bright Side” against a cheery yellow background. He even has his own television show, “Fareed Zakaria’s GPS,” where last week he endorsed Barack Obama as the best hope for America’s future.

Zakaria argues that it is not so much that the U.S. is in decline, but that other powers have risen, requiring the U.S. to deal with them with more consultation and compromise. He believes that the U.S. “has the strength and dynamism to continue shaping the world” (Foreign Affairs) and that “the world is moving our way” (The Post-American World). He sees a “silver lining” in the current economic crisis, in that the country will be forced “to confront the bad habits it has developed over the last few decades” (Newsweek).

These bad habits include spending and consuming more than we produce, leading to record levels of household debt, which has grown from $680 billion in 1974 to $14 trillion today. Spiraling consumer debt has been matched by the government. “The whole country has been complicit in a great fraud,” he writes in Newsweek. He quotes the economist Jeffrey Sachs:

“We’ve wanted lots of government, but we haven’t wanted to pay for it.”

He believes the current crisis will force greater fiscal “discipline” by both families and government, recognizing that “this discipline will be painful for a country that has gotten used to having it all.” It will also be good for our country’s foreign policy. Being the only superpower “has made Washington arrogant, lazy and careless.” Perhaps we could get away with this arrogance when we were on top of the world. But things have now changed.

“We cannot keep preaching to the world about democracy and capitalism while our own house is so wildly out of order.”

My book, and this blog, make similar arguments, and I agree with all of this, but especially that last sentence, which appears near the end of Zakaria’s Newsweek essay. However, I think Zakaria understates just “how wildly out of order” our system has become. Record consumer and government debts and a bankrupt financial system and foreign policy, as bad as those are, constitute only parts of the problem. At the same time that we have been madly spending on consumer goods, wars and debt servicing, we have let languish education, health care, infrastructure, science and technology. We have shuffled to the side the hugely expensive fixes required for Social Security and Medicare. Poverty and inequality are higher in this country than a generation ago, and among the highest in the developed world. Even our vaunted democracy, eroded by money and abuse of executive power, is no longer such a beacon for other countries. A major part of my book shows how all these interrelated problems result in a much more serious situation than Zakaria recognizes.

While we seem prepared to spend a trillion dollars bailing out a financial system led by incompetent billionaires, we need at least that much to fix the health care system, not to mention these many other neglected issues. It is difficult to see where the resources will come from to mend our society, once the banks are taken care of. It will require many years to restore the United States, and a change in America’s mindset, as well as its priorities.

Zakaria concludes his essay by suggesting that

“if we can learn the right lessons from this crisis, the United States will once more be playing by its own rules.”

I am not quite sure what “the right lessons” are, or what our “own rules” are. I think the needed lessons may be deeper and broader than he suggests, and that we may even have to change the rules. I am not as optimistic as Zakaria, but even without optimism, one can always hope. And this election week offers much hope.