Population Statistic: Read. React. Repeat.
Sunday, May 22, 2021

Are you tired of having every Thomas L. Friedman column turn into a plug for his new book, “The World Is Flat”? I sure am, and I actually find Friedman’s thesis and arguments on globalization compelling.

The cure might be a dip into Clyde Prestowitz’s “Three Billion New Capitalists: The Great Shift of Wealth and Power to the East”. While he shares many of Friedman’s beliefs on the spread of geo-economic upward mobility, he’s decidedly less optimistic about how America will fare on a geopolitical level:

Like Friedman in The World Is Flat, Prestowitz describes how the world’s services are moving to India and how manufacturing is being transferred to China. He charts the rise of the European Union and its ever-strengthening euro. He marvels that Brazil, long the “eternal country of the future,” is finally on track to overtake Germany economically by 2035. But unlike Friedman, Prestowitz isn’t cheering.

While these countries are strengthening their advantage, he says, America still is acting like it’s the only player that matters. American households are in debt up to their eyeballs - and the money is going for personal consumption, not investments in infrastructure or other wealth-generating projects. Americans don’t save and Asians don’t buy, resulting in an out-of-control trade deficit. U.S. education - particularly in math and science - is well below par. And, to top it off, America, by insisting on “acting like the Lone Ranger and asserting absolute autonomy of decision and action,” has squandered “the respect and liking in which we were held by the world for decades.”

It wouldn’t be the first time a world hegemon couldn’t (or wouldn’t) see the warning signs until it was too late. A lot of it starts with policy at home, and currently, there are too many false indicators that things are just hunky-dory, and that American competitiveness will keep this country in front of the pack.

A chief reason for this belief is the worldwide benchmark status of the dollar. But like any other instrument of power, currency is fallible too:

For now, of course, says Prestowitz, America still holds the trump card (there’s that bridge metaphor again): the dollar. But even that may be in danger. While everyone accepts the dollar’s hegemony for now, only slight shifts in political and economic power quickly could change all that. Countries that have large accumulated dollar reserves - Russia and especially China - could exercise inordinate power over America’s destiny. “The lack of an alternative to the dollar is the only reason it hasn’t taken a big fall already,” writes Prestowitz. “But those alternatives are emerging.” They include the euro and an Asian version, the acu. Bet it could never happen? Significantly, Prestowitz notes, both Warren Buffett and George Soros are hedging that bet and have invested in foreign currency.

Power centers shift; there’s an historical inevitability to it. And while it’s not a zero-sum game, it’s close enough: The action shifts to where the capital sits. Right now that’s America, and the U.S. uses that position to its advantage. When/if other countries rise to prominence, they’ll take advantage.

Whereas Friedman adopts a technocratic view that free-flowing intellectual capital will make international borders superfluous, Prestowitz takes the crustier view that those borders will indeed persist, and the world of international power politics will play out as much as it always has. I have to agree with Prestowitz. As pesky and irrational-seeming as nation-states are, they aren’t going to go away anytime soon. Even a more-connected world doesn’t elminate the role of the state on a macroeconomic level; technocratic theory tends to miss the forest for the trees on this.

So the flat world might come into shape, but that doesn’t mean it won’t have some speedbumps along the way — with roads that tilt toward new (but historically recognizable) power centers. We’ll see how we navigate those roads.

by Costa Tsiokos, Sun 05/22/2005 05:45:13 PM
Category: Political, Publishing
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maverick behavior
I was hoping that Dallas Mavericks owner Mark Cuban had blogged something about his pivotal (albeit wholly fictional) role in today’s “Pearls Before Swine” punchline.

But, as of this writing, he hasn’t. I guess he’s too bummed about his team exiting the playoffs to take a peek at the funny pages.

by Costa Tsiokos, Sun 05/22/2005 03:42:12 PM
Category: Basketball, Bloggin', Comedy
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Spied the other day while tooling around beautiful St. Pete: An office called Bantamba! Tax & Accounting. That “!” is, indeed, part of the name.

I think Bantamba (exclamation mark optional) is a Swahili word, but in this case, it’s an amalgamation of Bantam Business Associates (BantamBA).

I don’t know about you, but when I’m looking for someone to do my taxes, I opt to go with a firm that eschews showy punctuation. Seems like something that would peeve the IRS unnecessarily.

by Costa Tsiokos, Sun 05/22/2005 10:39:09 AM
Category: Business, Florida Livin'
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