Global Crisis Blog

The Betrayal of American Prosperity

By Shlomo Maital

Clyde Prestowitz was President Reagan’s chief trade negotiator.  Later he founded the Economic Strategy Institute.  Clyde knows more about trade and trade negotiations than anyone.  And he is deeply troubled by how American political leaders,  Republican and Democrat alike, have sold America out, given away the store, and ruined their country.  He expresses this forcefully in his new book, just published:  The Betrayal of American Prosperity (Free Press, 2010).   Here is a small taste:

“In The Betrayal of American Prosperity, I explain that in the 150
years between 1800 and 1950 America became the richest country the
world had ever seen by developing an economic strategy similar to
that of China today. The United States rejected Adam Smith’s call
for it to be primarily a supplier of raw materials and agricultural
commodities and set out consciously to build a business-government
partnership to overtake the industrial leadership of Great Britain
by promoting technology development, investment in American
production in key industries, and massive infrastructure projects
like the transcontinental railroad. In the past fifty years,
however, we have largely turned our backs on this approach while
our “brightest and best” have subordinated our economic development
to geo-political priorities and embraced false doctrines like
consumerism, efficient markets, Ricardian free trade, and
shareholder value that, in an era of companies without countries,
are rapidly eroding the bases of our prosperity and national
security.”

Consider this, Prestowitz notes.  “China’s #1 export to the U.S. is computer equipment ($46 b.).  America’s #1 export to China is waste paper and scrap metal ($7 b.).”   Question: Which is the underdeveloped country?

“If we do not make dramatic changes quickly,” Prestowitz says, “we will confront a painful permanent slide in our standard of living.”

Think carefully about the probability that an American president, even Obama, will inflict pain in order to fix the decline and deterioration of America over 50 years.  Then judge your own investments and business accordingly, in a world where America’s decline is drastic and irreversible.