Tuesday, June 28, 2005

James Fallows 2016 memo

[California’s] solution to its financing crisis on its high-end campuses was defter – especially the “great Pacific Partnership” between the University of California and Tsinghua University in Beijing. This was a win-win arrangement, in which the Chinese Ministry of Education took over the funding of the UC Berkeley physics, computer-science and biology laboratories, plus the genomics laboratory at UC San Francisco in exchange for a 51 percent share of all resulting patents.

James Fallows's Countdown to a Meltdown - a master strategy memo to an independent candidate for the US presidency in January 2016 - is, on first reading, as good as I had heard.

It needs more reflection than I have yet given it (it’s not accessible online without subscription and I only got hold of a hard copy yesterday). Some parts of the scenario may well unravel on closer inspection – and, of course that may be part of his point; but there’s enough in here to be useful for some time. For example:

Everything changed in 2001. But it didn’t all change on September 11…Before there was 9/11 there was June 7, 2001. For our purposes modern economic history began that day. [On that day, the Bush administration] was…able to persuade [Congress] to authorize a tax cut that would decrease federal tax revenues by some $1.35 trillion between then and 2010... From that point on the US government had less money to work with than it had under the previous eight presidents…And as we will see, these cuts – the first of three rounds – did so just when the country’s commitments and obligations had begun to grow.

Cutting to the chase in 2016:

Here is our challenge

* Our country no longer controls its economic fundamentals

* Compared with the America of the past, it has become stagnant, classbound and brutally unfair

* Compared to the rest of the world, it is on the way down

Interesting to see Paul Krugman's piece in the 27 June NYT The Chinese Challenge, in which he makes the jump to the Chinese already being smarter today than the Japanese were in the 80s in that they are buying US stuff that is not prestiege but actually worth something. This accelerates a part of the Fallows scenario.

Nicolas Kristof's Glide Path to Ruin, also 27 June, has Fallows overtones too:

President Bush has excoriated the "death tax," as he calls the estate tax. But his profligacy will leave every American child facing a "birth tax" of about $150,000.

This is also a time to re-read last Ocobter’s interview with Louis Wells at the Harvard Business School (here). Fallows likely read the Business Professors’ letter.

Also worth at least two looks is John Elkington's American Cyclops, published in his blog on June 10 (and not on openDemocracy: sorry, John! - thanks for sending it that very evening) .

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