The Post-American World - Fareed Zakaria [102]
The trouble is that progress on any major problem—job creation, Social Security, tax reform—will require compromise from both sides. In foreign policy, crafting a strategic policy in Afghanistan, or one on Iran, North Korea, or China, will need significant support from both sides. It requires a longer-term perspective. And that’s highly unlikely. Those who advocate sensible solutions and compromise legislation find themselves marginalized by the party’s leadership, losing funds from special-interest groups, and being constantly attacked by their “side” on television and radio. The system provides greater incentives to stand firm and go back and tell your team that you refused to bow to the enemy. It’s great for fund-raising, but it’s terrible for governing.
Americans have managed to survive through terrible governance before, but not while up against the kind of economic competition we now face. When I left India, the marginal tax rate was 97.5 percent, corporate taxation was punitive, and business was stifled or went underground. Were I to move from New York City to Mumbai today, my personal tax rate would drop, as would every other rate, from corporate to capital-gains taxes. (The long-term capital-tax rate in India is zero.) Singapore now ranks as the number one country for ease of doing business, with a top tax rate of 20 percent. I know permanent residents working in the United States who are thinking of giving up their green cards to move to Singapore. To an Indian of my generation, this would have been unthinkable. The green card was a passport to the American dream. But for young Indians, there are many new dreams out there, and new passports.
But there are reasons for optimism. The United States faces huge challenges, but it also has enormous advantages. “I’ve always been bullish on America,” says Coke’s CEO, Muhtar Kent. “It’s the largest, richest market in the world. Look at the demographics alone. North America is the only part of the industrialized world that will be growing in people. It now has a higher birthrate than Mexico, for the first time in history.” Or listen to Alcoa’s German-born Klaus Kleinfeld, previously the head of Siemens: “I know the things that America has that are unique. The openness, the diversity, the dynamism—you don’t have it anywhere else. If you keep all these things, build on them, I still believe in the American Dream.”
The term “American dream” was coined during the Great Depression. The historian James Truslow Adams published The Epic of America in 1931, in an atmosphere of despair even greater than today’s. He wanted to call his book “The American Dream,” but his publishers objected. No one will pay $3.50 for a book about a “dream,” they said. Still, Adams used the phrase so often that it entered the lexicon. The American dream, he said, is of “a better, richer, and happier life for all our citizens of every rank which is the greatest contribution we have as yet made to the thought and welfare of the world. That dream or hope has been present from the start. Ever since we became an independent nation, each generation has seen an uprising of the ordinary Americans to save that dream from the forces which appeared to be overwhelming and dispelling it.”
Today, those forces really do look overwhelming. But challenges like them have been beaten back before—and can be again. The real test for the United States is, in some ways, the opposite of that faced by Britain in 1900. Britain’s economic power waned while it managed to maintain immense political influence around the world. The American economy and American society,