umair haque

umair haque

Nov 30, 2022 (

While Nobody’s Looking, America’s Quietly Transforming its Economy — And the World’s

Image Credit: Council on Foreign Relations

Right about now, something fascinating’s happening to the world economy. It’s changing before our eyes. And that’s a Big Deal, because for most of our lives, well…it hasn’t. It’s emerging from the ashes of neoliberalism — whose consequences has been stagnating and then declining incomes in much of the world, especially the rich world, fueling a wave of fascism. That’s unlikely enough — but what’s even more surprising is that at the heart of this transformation is America.

Right about now, most Americans, I’d bet, don’t quite know it — but a foundation is being laid for another era of American dominance and prosperity. If everything goes according to plan, something like the 1950s — a golden era, at least if you were lucky enough to be in the right social group.

How so? What am I talking about? What…new foundation for a new era of dominance and prosperity?

Consider how freaked out, well, Europe and Canada are right now. About what America’s doing. Positively. That’s a change, huh? It’s a huge one, a tectonic shift — because for most of our adult lives, it’s America who’s been a fading laggard next to Canada and Europe.

So what are Canada and Europe so worried about? Don’t take it from me, take it from them. “We’ve tipped into a new globalization,” French finance minister Bruno Le Maire recently said. “China tipped into this globalization a long time ago with massive state aid exclusively reserved for Chinese products. Right before our eyes, the U.S. has tipped into this new globalization to develop its industrial capacity on U.S. soil.”

Meanwhile, Canada fears that America’s green industrial policy will come at the expense of its own. America’s $370 billion investment in green industry dwarfs Canada’s own investments in low-carbon industry. Officials in Ottawa told Bloomberg that their country simply ‘can’t afford to go dollar-for-dollar with the U.S.’ in subsidizing nascent green firms and technologies.

Did you get all that? It’s funny, in a way, to see Canada and Europe a little bit freaked out by what America’s doing well. When was the last time that happened? Now. Why, precisely, are they so worried?

They’re afraid of Bidenomics. You see, Bidenomics gets…not a bad rap…it gets no rap. But there it is, actually changing the global economy. Like I said, that’s a Big Deal. It’s funny, too, that while Europe’s finance ministers quake in their boots and Canada’s government shudders, in America, Bidenomics gets next to no…coverage…credit…mention…in America. But it should.

What’s going on here is this. When America decides to flex its economic muscle, few countries in the world have much of a hope of matching it. And what Bidenomics is doing, now, is something genuinely a little revolutionary. On the ground, it’s a plan to make America a global economic leader again. Let me put that even more precisely, so you really get how revolutionary Bidenomics is — to the point that Europe and Canada are beginning to quietly freak out about it.

Remember why America had a golden age economically in the 1950s? No, I emphatically don’t mean culturally or socially or in terms of the complicated issues of race and democracy. Just…economically. It happened because, back then, America was a net exporter. It exported stuff around the world that it became famous for — from cars to appliances to lightbulbs and beyond. As a little boy, in the Third World, my grandfather’s prized possession was a classic 1950s American car. Those days were what established America’s position in the world as we know it today.

So when did America stop being a net exporter? in 1971. There’s another thing that happened that year — exactly — too. American incomes began to flatline. That’s not a coincidence. It’s a relationship. As it shifted to being a society that imported more than it exported, America’s industrial base, too, and all those stable, lifelong, middle-slash-working class industrial jobs began to disappear.

That trend accelerated through the 1990s, and by 2010 or so, the American middle class was, for the first time in history, a minority. And that had centrally to do with the fact that America had become a society of consumers, more than producers, really — but that, too, can hardly be one where incomes rise steadily, because, well, what are you really making to offer the world?

This single mega-trend is perhaps the true cause of America’s decline. As America declined, as the middle class vanished, as the working class fell into penury — in a classic repeat of the 1930s, as Keynes predicted, fascism, in the form of Trumpism, surged.

Yes, that’s a little oversimplified — but only a little. There’s plenty of truth to it, even if the details are to be shaded in with social and cultural issues, like how Reagan appealed to a sense of nostalgia and so forth. The point, though, is that American decline is centrally, fundamentally, about going from a net exporter in the 1950s, to a net importer in the 1970s, slowly at first, and by the 2010s, basically importing everything Americans needed to live from China, made of Russian and Saudi oil and gas, basically. Not good, for obvious reasons.

Bidenomics is a plan to turn all that on its headLet me say that again slightly differently, because both parts are important: Bidenomics is a plan to turn all that on its head. Why do both parts matter?

Let’s go back to the ashes of neoliberalism. What does neoliberalism say? Nations shouldn’t have plans. Instead, the “free market” should decide everything — what gets invested in, how much, for how long, and so forth. Sounds great in theory — doesn’t work very well in practice, especially in an age like now, where we have civilization scale threats like climate change. The “free market” wants its money back in less than a decade — meanwhile, we need to build basic systems that last another century or two, for food, water, agriculture, energy, healthcare, education, and so on. Good luck doing all that in a three year time horizon, with the lowest bidder trying to squeeze a penny wherever they can. It doesn’t work.

And more to the point, it hasn’t worked. While “the free market” — which just means hedge funds and banks at this point, basically — was supposed to “reinvent” the American economy every few years since the 1970s…what actually happened? Outside of Manhattan and San Francisco, America’s economic might began to atrophy in stunning, shocking ways. It’s once roaring industrial towns and cities became derelict war zones, basically, from Detroit to Baltimore. The idea that you didn’t need to have a plan — that a nation having a plan for its own future was a bad thing — that was a huge mistake. Because of course meanwhile, nations who did have plans, like South Korea (electronics) and Taiwan and Singapore (microchips) and China (consumer goods), skyrocketed to fortune and dominance.

So what’s utterly shocking to Europe and Canada is that…bizarrely…in a weird through-the-looking-glass moment…for the first time in modern history…it’s America…out of the blue…who has a plan…a national industrial strategywhile even they don’t. That plan is as simple as it is excellent. Make America a net exporter again. Of things the world needs, critically. Beginning with two big ones, microchips, the smaller one, and the really big one — clean energy and manufacturing. Get that right, and the entire world will beat a path to America’s doors — just like it did in the 1950s. Its mighty industrial cities might roar once again — like they did back then, too.

It’s a Big Deal. A huge one, really, which is why Canada and Europe are so freaked out about it. Now let me put all that more concisely, and come to the point.

Bidenomics is starting a New Global Race to the Top. Now that America’s putting huge investments into making stuff the world needs, and positioning itself to become a net exporter again — like clean energy, green manufacturing, microchips — those who wish to stay competitive with it, like Europe and Canada, have to pony up, too. America just raised the stakes dramatically. Biden’s out there doing the kinds of things only America, really, can do — putting half a trillion dollars into investing in the stuff above, bang, just like that — and now Europe looks feeble and slow by comparison. Canada, meanwhile, being that much smaller an economy, is complaining that it can’t keep up.

All that’s an eminently good thing. It’s long overdue that the world has something like an Arms Race for Clean Energy and Green Manufacturing and Reinventing Basic Civilizational Systems Which All Depend on Them. We’ve been slacking on reinveinting all these fundamentals as a civilization, precisely because major players like America haven’t been leading. But now America’s back, and it’s leading with a vengeance. It’s saying to the world: here’s what we can do. Ante up, if you want to stay in this game.

To make that concrete, now Europe is going to have to dramatically increase investment, too, in all the above — if it wants to stay competitive. That’s an excellent thing, because of course, right about now, we need a huge wave of investment in exactly all this, clean, green, energy, manufacturing, every basic system, from food to water to electricity to medicine which all depend on them.

A Race to the Top to invent the post-industrial economy of the 21st century? Awesome. It’s exactly what the world needs. And America’s kicking it off. That’s a double freak out moment for Europe and Canada, because, well America’s not supposed to do stuff like this. It’s supposed to…the laggard. They’re supposed to be visionaries. Not anymore. Things are now changing. The global economy is at an inflection point.

If Bidenomics goes on to succeed, and really does make America a net exporter of things like chips and clean, green manufacturing and energy? The 21st century will belong to America. I don’t say that lightly. The entire world needs this stuff — not just because it’s clean, but because it’s cheap. Renewable energy? Basically free. If you can sell that to the world, well, you’re going to enjoy an era of dominance and prosperity like the 1950s, maybe only squared, because you’ll be the one basically rebuilding the planet’s failing systems, one country at a time. The stakes are that big.

That’s really why Europe’s freaking out, and Canada’s joining it. Nobody much in the halls of power anywhere has thought the 21st century might belong to America. America was written off long ago, perhaps even before Trumpism, as a has-been. The comeback, therefore, is shocking, out of the blue. America’s got a plan for dominance and prosperity…an American Century…exporting the basics systems the world needs to survive an age of extinction and climate catastrophe…not just plan, but a really good one? Now they’re going to need to up their game, too.

Let me add one final note. None of this is, as Europe and Canada are beginning to claim, “protectionist.” America’s not planning to protect these nascent industries — it’s building them precisely so they can supply the world stuff it needs, the whole world. That’s not protectionism. Nor is subsidizing this stuff 1930s era one upmanship either. This isn’t like subsidizing something useless, like, I don’t know, hedge funds — this is investing in public goods, because of course every dollar America spends on this goes on to benefit the whole world. Things like “a planet we can all live on” are, wait for it, public goods — we should all want them, because they benefit us all. That’s a technical point, but one worth considering perhaps.

The unheard, unsung story of Bidenomics. Don’t cry for it, though. Americans might not know it’s changing the world. But Europe and Canada — and the entire globe’s halls of power — are hearing its message loud and clear. America just raised the stakes. Ante up, or bow out. This is a Race to the Top, of building a post-industrial future, which revitalizes our working class and middle class and cities and towns, too — not to the dismal bottom anymore, of making things cheap, careless, and indifferent to their toxic side effects. That’s what tomorrow’s global economy is really about. Warm up’s over. Game on.

November 2022

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