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TOPIC: "How to Restore the American Dream" (Fareed Zakaria, Time.com, 10/21/10) Awesome read; It is their cover story this week


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"How to Restore the American Dream" (Fareed Zakaria, Time.com, 10/21/10) Awesome read; It is their cover story this week
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Read @ Time.com

(Emphasis added)

How to Restore the American Dream

By Fareed Zakaria Thursday, Oct. 21, 2010

The American dream for me, growing up in India in the 1970s, looked something like the opening credits of Dallas. [snip]

[SNIP]

A few years later, when I got to America on a college scholarship, I realized that the real American Dream was somewhat different from Dallas. I visited college friends in their hometowns and was struck by the spacious suburban houses and the gleaming appliances — even when their parents had simple, modest jobs. The modern American Dream, for me, was this general prosperity and well-being for the average person. European civilization had produced the great cathedrals of the world. America had the two-car garage. And this middle-class contentment created a country of optimists. Compared with the fatalism and socialist lethargy that was pervasive in India those days, Americans had a sunny attitude toward life that was utterly refreshing.

But when I travel from America to India these days, as I did recently, it's as if the world has been turned upside down. Indians are brimming with hope and faith in the future. After centuries of stagnation, their economy is on the move, fueling animal spirits and ambition. The whole country feels as if it has been unlocked. Meanwhile, in the U.S., the mood is sour. Americans are glum, dispirited and angry. The middle class, in particular, feels under assault. In a Newsweek poll in September, 63% of Americans said they did not think they would be able to maintain their current standard of living. Perhaps most troubling, Americans are strikingly fatalistic about their prospects. The can-do country is convinced that it can't.

Americans have good reasons to worry. We have just gone through the worst recession since the Great Depression. The light at the end of the tunnel is dim at best. Sixteen months into the recovery, the unemployment rate is higher than it was in the depths of all but one of the postwar recessions. And as government spending is being pared back, the economy is showing new signs of weakness.

Some experts say that in every recession Americans get gloomy and then recover with the economy. This slump is worse than most; so is the mood. Once demand returns, they say, jobs will come back and, with them, optimism. But Americans are far more apprehensive than usual, and their worries seem to go beyond the short-term debate over stimulus vs. deficit reduction. They fear that we are in the midst of not a cyclical downturn but a structural shift, one that poses huge new challenges to the average American job, pressures the average American wage and endangers the average American Dream. The middle class, many Americans have come to believe, is being hollowed out. I think they are right.

Going Global

[SNIP]

America's great corporations access global markets, easy credit, new technologies and high-quality labor at a low price. Many have had to cut jobs at home, where demand is weak, and have added them in the emerging markets that are booming. They are not "outsourcing" jobs. That word makes little sense anymore. They simply invest in growth areas and cut back in places where the economy is weak. None of them will ever give up on the American market — it is too large, too profitable and too central to their businesses — but the marginal dollar is more likely to be invested abroad than in the U.S. (Emphasis added)

[SNIP]

As countries have traded with one another over the past two centuries, they have prospered, and average living standards in those countries (primarily in the Western world) have soared. Those places that kept themselves protected (mostly communist and third-world nations) found that they had crappy industries, shoddy goods, massive corruption and slow growth. (See TIME's special report "Out of Work in America.")

And yet something feels different this time. Technology and globalization are working together at warp speed, creating a powerful new reality. Many more goods and services can now be produced anywhere on the globe. China and India have added literally hundreds of millions of new workers to the global labor pool, producing the same goods and services as Western workers at a fraction of the price.

Far from being basket-case economies and banana republics, many developing economies are now stable and well managed, and companies can do business in them with ease. At some point, all these differences add up to mean that global competition is having quite a new impact on life in the U.S.

[SNIP]

When Ford orders its next set of car parts, will they be made in Michigan or Mumbai? (Watch TIME's video "Owning a Nano, the World's Cheapest Car.")

This is not a hypothetical. [snip]

[SNIP]


Recapturing the Dream

So what is the solution? It's easier to identify the wrong answer than the right one. It would be pointless and damaging to try to go down a protectionist route, though polls show a stunning drop of support for free trade, even among college-educated professionals, its usual cheerleaders. But technology is a much larger driver of the hollowing out than trade. You cannot shut down this new world. How would you stop people from sending one another e-mails, which is what a lot of offshoring comes down to these days? Nor can you help a modern economy by shielding industries from world-class competitors, which just encourages greater inefficiency. I grew up in an economy made up of those kinds of industries, all tightly protected from "foreign exploitation and domination." It added up to stagnation and backwardness.

There are solutions, but they are hard and involve painful changes — in companies, government programs and personal lifestyles. For more than a generation, Americans have been unwilling to make these adjustments. Instead, we found an easier way to goose the economy: expand consumption.

[SNIP]

Full article @ Time.com
===================================

A lot to read there... and a lot more to think about. Love to read Fareed Zakaria... and this is an exceptional article.  No wonder it made it to the cover page article in Time magazine.

Even an article on Restoring American Dream realizes that outsourcing is not something that can be avoided anymore. It is the stark reality of our times that the marginal dollar will be INVESTED ABROAD than in the U.S.

How to correct this?

LOTS of HUGE challenges to be overcome, ALL of which are structural..  Most of all we need to sharpen our competitive edge as a country.  Towards that, and given the truly global nature of the new economy, our diversity is our biggest strength. 

Can you imagine an education and training program in the scale fo the GI Bill?  Many challenges that are going to be competing priorities coming ahead.


Restoring the American Dream: A Fareed Zakaria GPS Special will air on CNN at 9 p.m. E.T. and P.T. on Saturday, Oct. 30, and at 10 a.m. E.T. and P.T. on Sunday, Oct. 31


If I get a clip of the Oct 30th/31st CNN GPS Special, I'll post in this thread.




-- Edited by Sanders on Friday 22nd of October 2010 08:09:53 PM

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