The U.S. is better, stronger, faster than we think
Author Daniel Gross says that pessimism about the U.S. economy is unfounded. The rise of China and the developing world doesn't harm the U.S., but helps us.
Kai Ryssdal: It's easy, I know, to be economically pessimistic right now. I mean, Europe is once again a mess, with who knows what implications for us. The economy here is growing, but slowly. Jobs are coming back -- again, though, slowly.
Dan Gross, however, is decidedly optimistic. His new book on the promise of the new American economy is called "Better, Stronger, Faster." Dan, welcome to the program.
Dan Gross: Good to be here.
Ryssdal: Let me riff off the title of this book -- "Better, Stronger, Faster" -- and ask you whether you're looking at the same economy the rest of us are looking at.
Gross: I think I am. 'Better, stronger, faster,' of course, is a riff on the "The Six Million Dollar Man" from our youth, and this was Steve Austin took a catastrophic fall...
Ryssdal: 'We can rebuild him.'
Gross: And was rebuilt with this sense of American ingenuity and optimism. And I think that's what our economy went through in '08 and '09. We had a near-death experience, and rather than sort of lie down, I think our private sector in particular got up and restructured and started running.
Ryssdal: All right, so here comes the put-up-or-shut-up: You say early in this book that the ingredients are already here. You say 'it's tough to see what exactly is going to propel the United States forward, but the ingredients are already here.' Like what?
Gross: Well exports is obviously one of them. The fact that the world has been growing more rapidly than the U.S. is a big source of this declinist thinking. An author like Tom Friedman goes to China and says, 'Oh boy, they're building high-speed rails and look at us, we can't build infrastructure; we're finished.' Exports started turning up in April 2009, before the economy at large did. In the last two years, they're up 35 percent. When the rest of the world gets rich, or gets middle-class, they buy what we make. That includes Boeing jets, gas turbines. I found a family-controlled, little company in suburban Pennsylvania that makes wallpaper. 2007, 2008 -- 80 percent of this business was at home; now 70 percent is overseas.
Ryssdal: Let me see if I get this right and then sort of flip it on its head: The rise of the rest, you say, is actually good for us? Which makes sense, right? They're richer, and then they could buy more. I wonder, though, if part of the economic unease in this country is due to the change in relative standing, that so many other countries have risen so far and we have risen only incrementally, if at all.
Gross: I think that is actually the source of a lot of this. When we look at China and Brazil and Indonesia, and then countries that we've never heard of that are growing 7 or 8 percent, and we are growing not nearly as fast and not fast enough to create all the jobs we need -- it lessens our self-image. But I think that is also the great opportunity, is for our companies to get more integrated into overseas markets.
The Buick is actually very popular in China; apparently the last emperor drove one. I think that was probably the last one on the road. This factory looks just like a U.S. plant, except all the workers are Chinese. They make several hundred thousand cars there. Now, does that do a lot of great stuff for American workers? No, but it does a lot of great stuff for American shareholders; for all the pension and retirees of GM who need GM to do well in order to get their benefits; and of course for the taxpayers. The rest of the world is still extremely receptive to what we have to offer.
Ryssdal: Isn't that necessarily sort of finite, though? And I'm not talking like tomorrow finite, but at some point, the rest of the world will be saturated with American goods, and they will be trying to export their stuff, conceivably to us. Everybody can't win by being an export, right? Somebody's got to be the consumer.
Gross: True, but we still have the ability to create entire industries, massive businesses from scratch with very little capital. I use the example: Every year I go to Davos for the World Economic Forum, and they're all down on America. And all they want to do is see Sheryl Sandberg, the chief operating officer of Facebook. And the one event they want to go to the Google party. And when they're in the Google party, all everybody is doing is looking at their iPhones. So that's three companies: Google, Facebook, Apple. Combined net worth of about $800 billion. Ten years ago, they were nothing. We are not done creating things that work.
Ryssdal: Dan Gross, he's the economics editor at Yahoo Finance. His new book is called "Better, Stronger, Faster: The Myth of American Decline and the Rise of a New Economy." Dan, thanks a lot.