Sunday, July 2, 2006
Prestowitz @ MIT
This talk by Clyde Prestowitz @ MIT covers the same ground, with the same dire warnings, as Tom Friedman — the world, it's flat. The world is a-changin' and it may not be what we want it to be, unless, he says, we play our cards right, and all the other players do as well. Lots of evidence from past experience that that is going to happen. The specialty of the human race is lurching from crisis to crisis, a stumbling comedy that often results in tragedy.
Prestowitz notes, as Friedman has, the low savings/high consumption of the US and the mirror images of such behavior in countries like Japan and China where they save to a point of protectionism. Prestowitz feels we should raise taxes, modify the financial system so there is a unified world currency — a suggestion made decades ago. This would give us a sense of our true circumstances, our true financial context, which might spur us to daunting structural changes — the inertia of large systems never easily maneuvered.
Prestowitz offers as a suggestion Japanese land reform which he feels would have a big impact. It sounds surprising, but he explains that with small houses Japanese can't consume the way Americans do even though they have the spare change — there is no place to put the stuff — the second car and several stereo systems won't fit in a Japanese house. So the Japanese save rather than buy — American companies can't make the sale and import/export imbalance is exacerbated.
Although it sounds depressing, Prestowitz is fundamentally very American — he's got that can-do attitude and finally you feel hopeful that things can be worked out.