Many leaders from Asia’s growing economies believe the U.S. is in a state of denial. It’s time to stop bickering and put our house in order.
By Glenn Hutchins, contributor
Shortly after election day in the United States, I toured through the capitals of Asia and came away with a stark and chilling perspective. Our nation is perceived as an economic “failed state” which is attempting to export the consequences of decades of mismanagement and excess in every sphere of our economy, public and private.
There is an emerging judgment across Asia that the United States is not in a decline but rather an accelerating tailspin. We are perceived to lack the political will and collective toughness to confront our ills and swallow the bitter remedies that are prescribed. Our domestic politics are regarded as bewilderingly detached from anything even vaguely calculated to address our systemic flaws. Many Asian elites believe they must protect themselves from the American contagion.
This message resonated in my thoughts as I traveled through the streets of China and witnessed a dynamic economy rocketing forward in virtually every sphere of life. Of course, China is not without its issues and certainly will experience bumps in its headlong rush to the future. But it is investing at scale in both the “hardware” and “software” necessary for long-term prosperity — 21st century infrastructure, math and science education, basic research, indigenous technology, local start-ups, global natural resources, renewable energy, and on and on.
One cannot help but contrast the sights and sounds of China — or the growing economy and surplus-rich finances of South Korea — with the cacophony of America’s recent elections, an exercise in collective cognitive dissonance. The issues of apparent importance to us — squabbles between business and the administration, the Tea Party social agenda, mutual recriminations of partisan spending — seem so misguided as to be surreal.
The U.S. crisis
The Chinese are 32 years into their 100-year plan, and we lack even the most basic strategies for national competitiveness. Rather than focusing on creating the conditions for future prosperity, we are addicted to foreign capital and imported energy, and we demonstrate no resolve to break either habit. Worse yet, we are arguing over irrelevancies like whether to repeal the 17th Amendment.
Particularly troubling on my journey was to witness from afar the US reaction to the first foray of the Bowles-Simpson Commission on deficit reduction. It is just plain obvious that balancing our budget is vitally important to our future and the only action we can take to restore global confidence in the US.
So to hear squawks from the left about modest changes to Social Security and howls from the right about reasonable tax increases necessary to pay our bills is nothing short of depressing. Moreover, it is simply impossible to explain to our Asian counterparts, who regard all this with confusion and incredulity. From their perspective, we are acting like unruly children wallowing in our own undisciplined needs.
It is past time to put aside these childish ways. As in other moments in our history, we will be judged on whether we have the mettle to make the painful sacrifices necessary for future generations to prosper. We must behave like adults and defer the gratification of our own immediate wants, interests and ideologies.
This path forward starts with expeditiously adopting the Bowles-Simpson plan. But our national crisis requires something much deeper. We must take collective responsibility for our predicament — no more finger-pointing or blame-assessing. We must recognize that we are all to blame — homeowners and banks, tax-cutters and big spenders, multi-nationals and labor unions, big government progressives and “just say no” minimalists.
We have had just a handful of challenges of this magnitude and urgency since our country’s founding. This one might be the most difficult because there is no immediate military threat and call to arms. Our problems are internal and structural. The leaders of our country — government and business, Republican and Democrats — must lead by setting an example of foresight, cooperation, compromise and sacrifice.
The Bowles-Simpson proposal will be their first, critical test. Will our leaders be found willing or wanting, heroic or pandering? Will Americans prove that we are an exceptional nation or simply an over-extended empire in decline? The world is waiting in judgment. And many who watch from Asia are deeply skeptical.
Glenn Hutchins is a global investor based in New York. He is a former White House economic policy adviser in the Clinton administration and currently serves on the Board of Trustees of the Brookings Institution, the Washington, D.C. public policy think tank.