Oh, great. Another bit of gloomy news: Last week, the Federal Reserve issued a 2013 forecast more pessimistic than its previous one. More evidence we’re doomed, I suppose — fated to fall from the fiscal cliff, and even if we don’t collide with economic armageddon at the bottom, there’s sure to be something really bad down there.
I don’t mean to make light of the Washington deadlock but sometimes it’s well to remember the world is full of surprises. As I’ve mentioned occasionally in this space, my rule of thumb is implicitly optimistic: That thing out there that seems really bad, that everyone is worried about, probably won’t happen, at least not as we expect.
What’s likely to whack us won’t be what we can see and fear, but what we don’t expect and can’t yet see: planes flying into office buildings or a downdraft in housing prices for the first time in living memory.
Maybe the two parties will strike a Grand Bargain that dispels the chronic economic uncertainty. Maybe that will trigger a gusher of corporate investment and faster growth. After all, the stock market doesn’t seem worried about cliff diving. It’s been trending up for weeks.
I’m just saying that if we’re fretting about something we can see and debate, that could be a good sign. So maybe it’s time to attempt an optimistic column. The immediate future may look awful, but when you look past that you find reminders of America’s enduring strengths.
Start with Philip Stephens of the Financial Times, who suggests the gloom and doom is absurdly overdone. This is a good time to “buy America,” he writes.
Stephens reports that the Chinese aren’t writing America off. Far from it. A Beijing-based outfit serving China’s intelligence agencies concludes that despite America’s current problems, its military reach and intelligence capabilities will remain unparalleled for decades. The U.S. may have an underperforming economy and a huge debt problem, but those difficulties are solvable. America’s advantages are structural, its immediate problems temporary.
The United States still derives a great deal of security from geography alone, and that won’t change. Moreover, Washington sits at the nucleus of a dominating network of alliances. America has abundant natural resources and its demographic profile is healthier than any potential adversary.
The discovery of huge amounts of domestic oil and gas, thanks to the spread of hydraulic fracking, is a game-changer. “Europeans,” Stephens noted, “are already complaining that cheap U.S. gas is encouraging a flight of energy intensive businesses across the Atlantic.”
Another major source of strength is America’s capacity for welcoming and absorbing immigrants.
Immigration has been a hot-button issue in recent years, especially on the right. But this is an issue that many Republicans have gotten badly wrong. In a recent Politico/George Washington University poll, 62 percent of respondents said they favor giving illegal immigrants an eventual path to citizenship as part of a comprehensive reform. Even a plurality of Republicans in the poll backed a path to citizenship.
As Harvard’s Joseph Nye writes, immigration reform would do much to prevent the decline of U.S. power and influence. While too-rapid immigration can cause social problems, Nye notes that “over the long term, immigration strengthens U.S. power.”
Lee Kwan Yew, a savvy observer of U.S.-China dynamics, scoffs at those who argue China will surpass America because the U.S. still draws the best and brightest from around the world and “melds them into a diverse culture of creativity,” as Nye put it.
China, in large part because of its misguided one-child policy, will age rapidly, as will many other developed countries. But, says Nye, “America is one of the few that may avoid demographic decline and maintain its share of world population.”
Our political class is quite capable of fouling up the present, but the nation’s long-term prospects remain promising.