Globalization will result in more parity, but we can get richer still, at a lower growth rate, while developing countries catch up to us, at a faster rate, That’s actually very good for the world.
I think the psychological discomfort is that we, Americans, are no longer wildly richer than that rest of the world.
There’s globaliztion of knowledge and capital. That’s just how it it works.[/quote]
Brian: Except globalization isn’t really resulting in more parity in all. Everything is interconnected and, in many ways, its a zero-sum game (i.e. for someone to win, someone else has to lose). You need look no further than the so-called BRIC countries (Brazil, Russian, India and China) to see the interconnectedness.
There are more and more reports lately of the bust occurring in China’s real estate market (http://www.foreignaffairs.com/articles/136963/patrick-chovanec/chinas-real-estate-bubble-may-have-just-popped) and the effects on Brazil (iron ore), Russia (lumber), as well as Australia and Canada, as Chinese demand for their goods and services has plummeted. Rather than a “rising tide lifting all boats”, we’re seeing more of a boom-and-bust cycle and one eerily reminiscent of the one here in the US that led to the fall 2008 crash.
The Chinese “miracle” is nothing more than a Potemkin village, fueled by bad loans pouring into infrastructure and real estate and the bills are coming due. Europe is in equally dire straits, but for different reasons and lacks the economic vitality necessary to pull free of massive debt obligations tied to their social model.
As battered as the US is, we’re still in a far better position to weather the storm and eventually pull out and ahead. As you correctly pointed out in another post, we simply lack the political will (or leadership) to do so.
