The Post-American World 2.0, by Fareed Zakaria

From 6-5-13:

1.  The future is not about the absolute decline of America but rather the relative decline of America (i.e., the rise of everyone else).

2.  China is a savings economy–encourages savings by artificially devaluing RMB to make it less valuable to natives.  Thus, Chinese have more of an incentive to save it rather than spend it since their purchasing power relative to the dollar is weaker.  The Chinese have about a 50% national savings rate, and they invest it in the safest investment on the planet–US Treasury bills.  This is not a big deal for the US, and there is no short term debt problem for the US.  The problem is if the US takes the borrowed money and spends it on “lattes” and not on investing in infrastructure and human capital.

3.  India–strategically positioned to partner with United States in post-American world.  United States should pursue this partnership as a counterbalance to China.

4.  China investments abroad work to build Chinese goodwill among emerging markets (especially in Africa).  Compare this to US military action in the now-fading unipolar world.

5.  United States needs to shift policy from a unipolar view to a multipolar view.  US influence can be enhanced if it changes it’s role from guardian to facilitator on the international arena.

6.  United States brought globalization to world, but it must realize that it has to globalize it’s own economy and society.

7.  Education in United States is better than the media reports.  ⅔ of students do well, ⅓ are doing terribly.  The challenge is to get the ⅓ to participate in the economy of the future.  In terms of engineering, quality of engineering education better in the United States.  In India and China, many engineers, but many are not good or qualified at all.  Example, engineers at top firms get 15% salary increases every year, which would not be possible if there is an oversupply of good engineers.

8.  China devaluing currency–estimates that China devalues by 20%, but cost of manufacturing is 25% less than US.  Thus, forcing China to “not cheat” would not close the manufacturing gap, and thus, may not be worthwhile for United States to pursue.

9.  Indian and Chinese economy expected to maintain high levels of growth for next few decades.  The challenge for China is how to sustain political and social transformations.  These problems also exist in India, but to a lesser extent due to the democratic nature of Indian political system.  

10.  Parallels of United States in post-WWII world to Britain of the mid-late 19th century and ancient Rome.  Decline of Rome was inability to sustain multiple colonies on different parts of the world.  Britain learned from Rome and found out how to deal with that issue, however, Britain’s down fall was two fold:  1.  Economics were fundamentally weak (though political system was strong)–didn’t train enough ppl to handle second industrial revolution ; 2.  Britain’s involvement in the Boer Wars bankrupted the country.  Parallels to United states:  1. United States is economically sound but politically weak; 2.  Iraq, though tremendously costly with minimal positive outcomes, still did not bankrupt the country.  Hope for the future of US, but we have to make the right decisions.