The Betrayal of American Prosperity: Free Market Delusions, America’s Decline, and How We Must Compete in the Post-Dollar Era
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- ISBN13: 9781439119792
- Condition: NEW
- Notes: Brand New from Publisher. No Remainder Mark.
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CONSIDER THIS SHOCKING FACT: while China’s number one export to the United States is $46 billion of computer equipment, the number one export from the U.S. to China is waste—$7.6 billion of waste paper and scrap metal.
Bestselling leader Clyde Prestowitz reveals the astonishing extent of the erosion of the fundamental pillars of American economic might—beginning well before the 2008 financial crisis—and the fantastic challenge we face for the future in competing with the economic juggernaut of China and the additional quick-rising economies. As the arresting facts he introduces show, the U.S. is rapidly losing the basis of its wealth and power, as well as its freedom of action and independence. If we do not make dramatic changes quickly, we will confront a painful stable slide in our standard of living; the dollar will no longer be the world’s currency; our military might will be whittled away; and we will be increasingly theme to the will of China, Russia, Saudi Arabia, and various malcontents.
But it doesn’t have to be that way. As Prestowitz shows in a masterful account of how we’ve come to this fateful juncture, we have inflicted our economic decline on ourselves—we abandoned the extraordinary approach to growth that drove the country’s remarkable rise to superpower status from the early days of the republic up through World War II. For most of our history, we supported our home industries, protected our market against unfair trade, made the world’s finest products—leading the way in technological innovation—and we were strong savers. But in the post-WWII era, we reversed course as our leadership embraced a set of simplistically attractive but disastrously fake thoughts—that consumption rather than production should drive our economy; that free trade is permanently a win-win; that all globalization is excellent; that the market is permanently right and government regulation or intervention in the economy permanently causes more harm than excellent; and that it didn’t matter that our factories were fleeing overseas because we were moving to the “privileged ground” of services. In a devastating account, Prestowitz shows just how flawed this orthodoxy is and how it has gutted the American economy. The 2008 financial crisis was only its most blatant and recent consequence.
It is time to abandon these fake doctrines and to get back to the American way of growth that brought us to world leadership; Prestowitz presents a deeply researched and powerful set of highly practical steps that we can start implementing immediately to back course and restore our economic leadership and excellence.
The Treachery of American Prosperity is vital reading for all Americans concerned about the future of the economy and of our power in the coming era.
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Prior to the use of lethal force in a naval engagement, international protocol requires firing a “wsrning shot across the bow” of a potentially threatening adversary. In his new book, “The Treachery of American Prosperity,” Clyde Prestowitz is firing just such a shot across the bow of America. He implores our policy makers in Washington to wake to the growing threat to our prosperity posed by China and additional quick-rising economies. It remains to be seen if this carefully researched, thoughtful volume will awaken this “sleeping giant” of ours, but if not, it will not be for lack of effort on Mr. Prestowitz’ side.
International trade and globalization are not the buzz words of Sunday afternoon at the ball meadow. These are hard subjects that weep out for logic, clarity, and sharp explication, all of which Prestowitz provides. He writes easily and clearly about tough, complex, arcane issues that we need to know about as enlightened citizens, but whose very difficulty tends to place off our attention for another day…another day when the shot across the bow is aimed amidships…another day when it is a day too late. Let us not fool ourselves, that day will come if we do not pay heed. That is Prestowitz’ message. Take heed. Read the book!
Reader’s Rating: 5 / 5
China’s #1 export to the U.S. is $46 billion of computer equipment – ours to China is $7.6 billion of waste paper and scrap metal. That factoid opens Prestowitz’s latest book, “The Treachery of American Prosperity,” and pretty much sums it up. Reading any further will likely increase your heart rate and blood pressure. On the additional hand, completing the book should be mandatory for every American – we’re running out of time to recover from our affliction from free-market delusions and literary torpor.
Things have gotten so terrible that efforts to revive our economy as a replacement for sometimes benefit others more. ‘Cash for Clunkers’ in 2009 boosted sales the most for Ford’s ‘Focus,’ (50% made in the U.S.A.), with the next five greatest beneficiaries being Japanese and Korean automakers. Trade deficits have cost the U.S. economy about 10 million jobs, and lowered incomes for many of persons remaining. Excluding income going to the top 1% (15% of total U.S. income, 4-5% in Japan and France), shows that the remaining 99% in Germany, Japan, U.K., and France have privileged income than the remaining 99% in the U.S. – despite our effective about 300 hours/year more than the OECD average. Much of our ‘favorable’ GDP growth vs. others is simply due to population growth (illegal immigrants), increased debt, and changes in U.S. productivity scoring. (When a 3 MHZ computer is replaced by a 6 MHZ model, we count the latest sale as ‘2 computers.’)
Manufacturing accounts for about 75% of corporate R&D, and manufacturing wages are about 20% privileged than persons in services. Manufacturing also has a much privileged job multiplier (4-5) than services (1-1.5), and provides better benefits. U.S. manufacturing as a proportion of GDP has fallen from 24% in 1980 to 12%, compared to Germany – 22%, France – 15%, and the U.K. – 13%. In 2008, 80 major compound plants were constructed in the world – none in the U.S. Only 2% of new semiconductor fab plants under construction in 2007 were in the U.S. – 30% were in China, 25% in Taiwan, 22% in South Korea. Japan, Korea, and Taiwan dominate the development and manufacturing of LDC screens; two new $3+ billion plants are being built in China, none in the U.S. Additional nations dominate photovoltaics, wind energy, advanced batteries, PCBs, shipbuilding, etc. Prestowitz blames privileged U.S. taxes and regulations as major causes – because non-expatriated profits are neither taxed in the U.S. nor excluded from earnings reports, I’d contend pursuit of fleeting-term profits from lower Asian labor costs as the largest problem.
We still have a services trade surplus – $140 billion in 2008. But Alan Blinder, ex- Vice-Chairman of the Federal Set aside, predicts as many as 29% of remaining jobs could be off-shored in the next few years – for the same reason. Example: Infosys and Wipro are Indian software companies with about $2 billion in revenues each; EDS and computer Sciences Corp. are U.S.-based competitors, with revenues of $25 billion and $15 billion. The Indian firms have profit margins exceeding 20%, the Americans only about 3%. Guess why IBM is expanding in India (6,000 in 2003, 110,000 in 2010), and its U.S. employment (120,000) falling.
Every page is brilliant – this should be mandatory reading!
Reader’s Rating: 5 / 5
Clyde Prestowitz provides a candid and thoughtful analysis of the economic challenges facing the United States as we go forwards in a global economic environment that has been transformed as a result of the decisions and trade-offs made by past US government administrations. As a ex- chief trade negotiator to Asia during the Reagan administration, Prestowitz provides a unique past perspective on the various trade policies and economic trade-offs we have made as a nation to support our geopolitical purposes across the globe. This past perspective is provided in the first four chapters of the book through a non-partisan approach that clearly demonstrates this is an American problem that has been made by both political parties. During the past analysis, Prestowitz provides a thorough and thought provoking analysis of the issues our early founders, particularly Hamilton and Jefferson, wrestled with in determining the role government should play in helping to foster the economic development of the new nation. Prestowitz’s argument is a convincing analysis that demonstrates that the “American Way” as outlined by the Washington Consensus is a relatively new and distinctly different approach than that fostered by our founding fathers. In additional words, the early economic policies and institutions that helped to make America the richest and most powerful nation in the history of the world stand in stark contrast to persons promoted by political administrations of the past forty years.
While painting a candid but to some extent bleak picture of the present day economic posture of the United States, Prestowitz does not place the reader lacking hope. While clearly an opponent to orthodox free trade as espoused by the Chicago school, Prestowitz helps the reader to know the fundamental assumptions that result in the flaws linked with this philosophy and argues for a more practical approach to honest trade that is grounded in the realities encountered in real world transactions. He concludes the book with four chapters that provide a prescription for business leaders, politicians, policy makers and all citizens to follow in an attempt to help America regain its positioning as the leader in the global market.
While this book is written by an accomplished international economist, Prestowitz’s style is engaging and thoughtful. Prestowitz presents his opinion with just enough significant statistics and a splattering of case studies and vignettes to keep the reader wanting to continue to go through each chapter. Rather than gloss over some of the more hard and vital technical aspects of the global economy, Prestowitz presents them in clear and simple terms that are easily understood by persons with a basic understanding of global economics. His analysis of currency valuations and the impact on trade deficits is just one example of where he excels in explaining the nuances of global economics to the uninitiated.
I would fervently recommend this book for anyone interested in gaining an apolitical perspective on the challenges America faces today in the global economy. Business leaders, policy makers, students of economics or interested citizens will all benefit from Clyde Prestowitz’s deep insights and vast practical wisdom. He has done a fantastic service to his country by presenting this forthright and candid analysis in a non-partisan prescriptive approach.
Reader’s Rating: 5 / 5