Trading places?

Tom Friedman’s pop quiz, which Rocket Man debunked so masterfully, was not the only piece in yesterday’s New York Times arguing that the U.S. is on the wrong track and heading for trouble. Fred Kaplan had a similar piece called “China Expands, Europe Rises, and the United States. . .” The title leaves it for the reader to fill in the blank, but the article strongly suggests that the missing word is “declines.”
And that looks like this year’s theme from the left. For the past two years, it was all about unemployment, then slow job creation, then the failure to create enough good jobs. But last year was an election year, so the main thing was to tell tales of current widespread woe, no matter how inconsistent with those pesky numbers. Now it’s time to plant the seed of longer-term doubt, so this year it will be all about the declining value of the dollar, high levels of foreign investment, and other ominous sounding facts. The reality is that at almost any given time there is some set of economic statistics that is unfavorable. Liberals have made an art form of showing, during Republican administrations, how whichever set looks bad at a given moment spells short-term or long-term doom.
Which brings me back to Kaplan’s article. His declinist suggestion rests on three facts: the strength of the Euro vs. the dollar; the large amount of foreign investment in this country; and the fact that our troops are spread thin in Iraq. But he’s honest enough to acknowledge that the first two items are not unambiguously bad news — they have both good and bad consequences. And the third hardly sounds like an indicator of long-term decline.
In fact, a look at long-term indicators makes Kaplan’s claim that Europe is “rising” difficult to take seriously. Europe is plagued by, among other problems, an aging population, massive disruption caused by Muslim immigration, and vastly over-regulated economies. The Euro’s present good run shouldn’t make any American feel envious of Europe.
UPDATE: “Declinism” has no place in this Washington Times piece by David Sands , which contends that U.S. power, both “hard” and “soft,” is still increasing due in large part to our values and our ability to inspire the dreams and desires of the rest of the world. Sands correlates the strength of our cultural institutions with the absence of governmental interference. This is true of such diverse, and in some ways conflicting, institutions as our churches and our motion picture industry. Unlike Europe we have never had either state sanctioned religions or state subsidized films.
Once again, the lesson seems to be that freedom works. If so, then the freer we remain the less we need to worry about losing ground in the long run to nations and blocs of nations that aren’t as free.
FROM A READER: Reader Fred Vogel has this to say about Kaplan’s piece:

Just read your blog article about Fred “Consider the Source” Kaplan, pointing to the “weak dollar/strong Euro” as a long-term indicator. I’ve
been in Japan for about 17 years, and I’ve seen the yen/dollar exchange
rate vary wildly between 154 yen/$1 and 89 yen/$1. In that time I’ve read
hundreds of columns proclaiming the earth-shattering significance of
changes of 5 yen up or down. Big time analysts write articles about how a
weak economy makes the yen (or dollar) go up, then makes it go down.
Later, a strong economy makes the yen (or dollar) go up, then makes it go
down. We hear that if the dollar weakens by 10 yen, it will be a disaster
because all Japanese exporters will lose money; the yen subequently rises
15%, and we hear nothing more about it. A strong currency now means a
strong economy! Curious. Maybe Fred Kaplan could explain it.


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