As Barack Obama huffs and puffs about his tax plan, which is unlikely to pass in the Democratic-majority Senate much less the Republican-controlled House, Robert Zoellick, president of the World Bank, has provided a much broader view of where the United States stands amid great changes in the world and some useful guidance on what direction public policy ought to take.
Zoellick spoke at George Washington University on Sept. 14, midway between Obama’s Sept. 8 speech to a joint session of Congress calling for a second stimulus package and his Sept. 19 speech in the Rose Garden laying out the tax increases that he evidently believes will, somehow, lead to the creation of jobs.
Zoellick devoted some of his speech to World Bank business, but he also provided a much broader perspective than most officials do, starting with a comparison of where things stood when the foundations of the World Bank were laid at the Bretton Woods Conference in 1944 and where we are today.
Back then, developed countries accounted for 80 percent of the world’s gross domestic product and the U.S. for nearly 50 percent. Much of the world was in ruins, starvation was rampant, disease afflicted millions of children.
Today, we’ve been seeing enormous growth in what we have been accustomed to call “developing” countries. They have been growing nearly four times faster than “developed” countries, and they account for nearly half of total global investment and global economic growth today.
In effect, we are going through a period when China and India are moving rapidly from Third World to First World status. That’s true as well of millions in developing countries in Latin America, Asia and even Africa.
Nothing like this enormous transformation has ever happened before, and nothing like it will ever happen again.
Interestingly, these countries have developed in part by copying Western institutions but also by creating their own public policies.
That this unprecedented rapid development has caused some problems for the United States and other advanced countries should be no surprise. Any sweeping change renders some old practices obsolete and requires some institutional adjustment.
Zoellick, who served in the Reagan and both Bush administrations, says he is skeptical of predictions of American, European or Japanese decline, but admits we have work to do. The U.S. needs “credible and definitely possible action — not just short-term fixes — on debt and deficits to restore confidence.”
Nations need, he said, to “focus on structural and tax reforms to spur private-sector growth, boost productivity and create jobs.”
And advanced countries need to practice what they preach on fiscal discipline, free trade and sustainable debt.
All of which sounds like a pretty stringent critique of what Obama has been up to lately.
One of the underappreciated truths about Obama is that he isn’t all that interested in public policy — much less so than Bill Clinton, considerably less so than George W. Bush.
The times call for serious governance, as Zoellick says. But Obama seems uninterested in serious policy issues and interested only in cheap-shot campaigning.
