That Should Still Be Us (eBook)

Introduction

Thomas Friedman and Michael Mandelbaum’s book That Used to Be Us starts out with an anecdote, as all Thomas Friedman books must. While attending the 2010 World Economic Forum summer conference in China, Friedman was deeply impressed by the new Beijing South Railway Station, a huge modern building covered with solar panels and with high-speed trains coming and going. It was built, he calculated with wonder, in only eight months. He compared that with the escalators in his local train station in Bethesda, Maryland, outside Washington, DC, that had been undergoing repairs for nearly six months.

“A simple comparison made a startling point,” he and Mandelbaum wrote. “It took China’s Teda Construction Group thirty-two weeks to build a world-class convention center from the ground up—including giant escalators in every corner—and it was taking the Washington Metro crew twenty-four weeks to repair two tiny escalators of twenty-one steps each.” (The escalators in question, one should note, are not “tiny,” as triple Pulitzer Prize winner Friedman and his coauthor wrote. I go through this station myself half a dozen times a week. They are among the longest in the United States with about a hundred steps each.

For Friedman and Mandelbaum, this was the perfect example of how China will beat us: with a sense of urgency and scale. Americans are willing to settle for less these days, they said. Of course, they could have used the exact same example as an argument against his thesis: the Chinese expect to be ferried around in overly expensive government trains while American workers are hardy enough to walk up stairs to work if they have to. That’s the trouble with anecdotes.

But what is the real reason why it will take the Washington Metropolitan Area Transit Authority (WMATA) twenty-four weeks (at best) to repair the Bethesda Metro escalators? The first reason is that the WMATA is a miserably managed mess. Maintenance, one of the most important functions of any advanced industrial economy, has been documented throughout the Washington area Metro system as a bad joke.

The second and main reason is that America’s own domestic industrial base is a pale shadow of its old self. It is far more difficult to get spare parts and especially hard to find the skilled engineers necessary to keep older machinery working smoothly. Why is that? Because successive US administrations for thirty years have done exactly what Friedman has ceaselessly urged them to do—maintain free trade with the rest of the world, especially China, and refuse to protect America’s old-fashioned traditional manufacturing base.

Memo number one to Messrs. Friedman and Mandelbaum: if you insist on focusing US government efforts on high-tech research and development and refuse to protect low-tech, far-from-cutting-edge traditional industries, you can expect endless delays in getting spare parts for your Metro rail escalators, your buses, the wonderful new high-speed-train systems, and everything else you fantasize, because you no longer have the broad industrial base to produce those spare parts and basic systems yourself.

And that is likely also the real reason why China was able to build its new super railway station in only eight months: it’s capable of producing most, if not all, of the components for anything it wants to build right there in its own factories. And it has the foreign currency on hand to easily afford to buy the rest overseas.

And why is that? Because the Chinese, like the Germans, have very sensibly protected their own industrial economy from potentially destructive foreign competition.

And where did they learn to act in this manner, which is so different from the idealized flat world of Friedman’s endless siren songs? They learned it from us because that used to be us.

Friedman and Mandelbaum tell another story, of a company called Endo-Stim, as an example of how the future will work. That story says a lot more about their real concerns than the broken escalators of the Bethesda Metro station. EndoStim is a company in St. Louis developing a treatment for acid reflux. It’s a very small yet very international company. The CEO’s “head office is an iPad.” It’s not clear from their story how many people work for EndoStim, but it appears it’s no more than a handful, all highly educated and highly international. It’s not clear that their product will ever make it to market, but that’s not the point. What matters to Friedman and Mandelbaum is that it’s “lean” and not filled with workers. One thing you quickly learn reading Friedman and Mandelbaum is that they really do hate ordinary American workers. They say, “You’ve heard the saying ‘As goes General Motors, so goes America.’ Fortunately, that is no longer true. We wish the new GM well, but thanks to the hyper-connecting of the world our economic future is no longer tied to its fate. The days of a single factory providing 10,000 jobs for one town are fast disappearing. What we need are start-ups of every variety, size, and shape. That is why our motto is ‘As EndoStim goes, so goes America.’”

A paragraph later they write, “While rescuing General Motors will save some old jobs, only by spawning thousands of EndoStims—and we do mean thousands—will we generate the good new jobs we need to keep raising this country’s standard of living.”

And here we have the core of Thomas Friedman’s prescription for America. First, we let China and South Korea have all those high-paying old-fashioned jobs making cars. We don’t need them. Second, we retrain all those auto workers as doctors, engineers, and MBAs. Then we get those Asian countries to start venture capital funds to pay for thousands of start-ups that may or may not bring products to market. Everybody wins!

Well, no. China wins! South Korea wins! Japan wins! But America loses! America loses! America loses!

America loses because most of the well-paying industrial jobs in China, South Korea, and Japan are not in Friedman’s cutesy little enterprising high-tech start-ups. Friedman and Mandelbaum express their cavalier sloppiness on facts and even math when they write, a bit further, “The same forces empowering EndoStim and [a similar company] Eko are also empowering one- and two-person firms that can go global from anywhere. We can see this in the multibillion-dollar come-out-of-nowhere ‘apps’ industry. . . . An industry that did not exist in 2006 will be generating $38 billion in revenues within a decade.”

Those $38 billion are presented with such astonishing fake authority. There is simply no way to be that confident and that specific about such a hypothetical income stream. Even if it were true, against just the $1.4 trillion added to the national debt in three short years by President Obama, or compared to the continuing $500 billion annual US trade deficit with the rest of the world, that $38 billion figure is just peanuts. Peanuts.

It’s also ironic whenever Friedman and Mandelbaum celebrate smart phone technology. Smart phone innovation has been locked up by heavily protected advanced industrial economies. Also, these devices require the use of rare earths, more than 90 percent of which per year are mined in China. So boosting investment in Friedman’s beloved smart phones will only add to the trade deficit (http://economicsintelligence.com/2011/03/02/the-strange-logic-of-the-iphones-economics/). How many of these wonderful new apps are being programmed in India?

Most maddeningly, Friedman and Mandelbaum complain that, no kidding, the big problem with kids today is that they spend more time playing with their smart phones than doing homework. Well hell, someone has to buy those $38 billion in apps he hopes we’ll be programming, right?

If The World Is Flat was Thomas Friedman’s 1.0 wisdom of globalization and free trade, and Hot, Flat, and Crowded was his 2.0, then, of course, That Used to Be Us is the 3.0 upgrade. But really, it’s just Friedman 1.2, with Mandelbaum’s input, with probably more bugs added than fixed. Like the famous Bourbon kings of France and Spain, Friedman has forgotten nothing false and remembered nothing true. His supposed 3.0 upgraded arguments here are just the same old lies, fantasies, and sloppy, easily disproven clichés we’ve seen in his previous books.

I always despised Pangloss, Voltaire’s naive optimist who thought that everything, even the 1755 Lisbon earthquake that killed scores of thousands of innocent people, was all for the best. (Voltaire despised Candide’s adviser Pangloss, too; that’s why he wrote the book.) The whole point of writing this book is to address the grave crises that America now faces. But the clichéd, fact-free solutions that Friedman and Mandelbaum peddle in That Used to Be Us are the very things that have led the United States into this awful mess.

So where does Friedman, with Mandelbaum, now identify the main areas of crisis? They concentrate on the following areas:

• “[We] as a country have failed to address some of our biggest problems—particularly education, deficits and debt, and energy and climate change.”
• “[We] have stopped investing in our country’s traditional formula for greatness.”

I’m sure you’re thinking that it is only in this...