Time For Perspective

Times of rapid change often induce wild mood swings ranging from euphoria to severe melancholy. All one has to do is look back at the advent of the Internet and the tech boom of the 1990s to be reminded of how insane good times can get.
Yet Americans also can observe the unprecedented global economic boom and suffer a crisis in national confidence. This latter topic was the subject of a talk by Fareed Zacharia, editor of Newsweek International, when he spoke at Schwab Institutional‚s annual conference in Las Vegas in late October.
It‚s only natural for anyone to catch a bout of reverse vertigo watching the stunning rise of emerging economies in the past decade. Zacharia threw out reams of statistics to drive this home. Only a decade ago, the ten biggest shopping malls in the world were all located in America. Now only two, No. 9 and No. 10, are. The world‚s biggest film industry center is no longer Hollywood; it‚s Bollywood. The world‚s biggest casinos are in Macau, not Vegas. And the bragging rights to the world‚s tallest building keeps moving from one developing nation to the next. The list goes on and on.
This phenomenal growth has come about largely because many developing countries have embraced American-Western ideals such as free trade, civil law and, in some cases, democracy, which in economic terms, can be a double-edged sword. As the Indian-born Zacharia noted, "China has achieved its growth because of its government; India has achieved its growth in spite of its government."
China‚s economic achievement of 20 consecutive years of double-digit economic growth has never been reached by another nation, but the social and environmental costs have been enormous. How it all plays out remains to be seen. Races to build the world‚s tallest buildings have historically marked the beginning of the end of many economic booms.
But there‚s no denying that the rising power of these economies is producing a wave of insecurity that borders on xenophobia at home. From Lou Dobbs to John Edwards to Pat Buchanan, bashing foreigners is the rage of the day. Zacharia cited a recent poll showing that 65% of members of the Republican Party, traditionally the party of free trade, think free trade is a bad thing. Meanwhile, Edwards is trying to bait congressional Democrats to torpedo a free trade deal with Peru, a nation whose gross domestic product is slightly smaller than Connecticut‚s.
Zacharia also shredded the "engineering gap" myth, which holds that America graduates 70,000 engineers a year while China and India graduate 900,000. While they may graduate 900,000 engineers, most have six-month or one- to two-year degrees. Only about 200,000 earn four-year degrees and some of the best and brightest of this elite group go, guess where, to do their graduate work?
The fact that trade is booming, living standards are rising and national economies are increasingly linked is a hugely positive development for everyone, including America. It also disperses economic risk more widely, as the toxic subprime bombs exploding in banks as far away as Taiwan, Australia and German reveals. But learning to live in this new world will require a modest change in perspective.