Fifteen years into the 21st century, there are huge questions about America’s role in the world.
The country that entered the new millennium as the undisputed superpower has faced a series of setbacks.
The Sept. 11 attacks and the subsequent invasions of Afghanistan and Iraq cost thousands of American and other lives as well as prestige and $1 trillion or more in borrowed funding. The war in Iraq destabilized the Middle East and the outcome in Afghanistan is not certain.
The 2008 financial crisis triggered massive government intervention, damaged the middle class and exacerbated an income gap that’s been growing since the 1970s.
The rapid rise of China, a military rival with the world’s second-largest economy and a seemingly insatiable appetite for energy and industrial materials, has put America’s No. 1 ranking at risk.
A less resilient economy might have permanently been knocked off its pedestal, but America is not that easy to count out.
Lately, things have turned around a bit for the U.S. on several fronts:
• We are leading the industrialized world with solid, if unspectacular, GDP growth. Our federal deficit seems under control and our economy, at least by some measures, is again closing in on full employment.
• The Obama administration’s foreign policy moves are creating opportunities for global companies. Movements toward more normal relations with Iran and Cuba, which are gaining momentum, could shift the balance of economic power in the Middle East and Latin America.
• The president’s proposed Trans-Pacific Partnership, though recently stymied by disagreements over agriculture subsidies and other details, has the potential to do the same for his “pivot to Asia.”
• At home, our entrepreneurial culture is alive and well. Innovations in tech-autonomous vehicles, the sharing economy (Uber, Airbnb, etc.) and the Internet of things still come largely from the U.S. The talk is of a new “fab five” — Apple, Google, Facebook, Amazon and Netflix — companies capable of massive disruption with powerful global brands.
• Energy choices abound, especially for North America. And the U.S. has reasserted itself in the climate change debate with President Obama’s Clean Power Plan, one that will abandon dirty coal in favor of natural gas as a bridge fuel to renewables.
A closer look at the potential effects of the Cuban and Iran initiatives is particularly revealing. Both countries have highly educated populations with much economic potential.
Cuba is a tiny economy with a GDP of $70 billion but the potential to be three or four times larger. On a GDP per capita basis, the U.S. is at about $54,600, while Cuba is around $10,200, based on 2010 data adjusted for currency fluctuations. Moreover, realignment with Cuba could open the door to struggling but much larger Venezuela and blunt the Chinese overtures to Ecuador.
Iran is more of a regional heavyweight. It is the second-largest economy in the Middle East behind Saudi Arabia and second in population after Egypt. Years of sanctions mean it too has a very small GDP per capita, around $14,600 (2014 estimate) and is badly in need of technology and upgrades.
We will leave the foreign policy issues of engagement vs. continued sanctions to others. From an economic perspective, engagement with Iran has the potential to dramatically shift economic power in the region.
Locally, technology centers like Colorado’s Front Range are proving that innovation is still America’s forté. An energy resurgence — led by Colorado’s unique blend of cleaner fossil fuels and renewables — has given the U.S. a powerful new card to play on the world stage. Moving toward a global consensus on climate change and trade could do much for our state’s economy.
The bottom line is that global leadership is not America’s birthright. Rather, it is a big responsibility that must be earned and re-earned each generation.
In a chat with Charlie Rose, New York Times columnist Tom Friedman talked about Obama as a risk-taker who is not afraid to look for game-changing solutions. The U.S. might be on the cusp of changing the game.
An America that has successfully managed two large threats — Cuba and Iran — and restored a modicum of balance to its Middle East policy would be a powerful nation, one that is better equipped to exert its economic heft in a multipolar world.
Lloyd Blankfein, CEO and chairman of Goldman Sachs, recently talked to business magnate Michael Bloomberg about China’s “huge execution problem” and the inefficiencies inherent when central planning and not markets allocate capital.
Our emerging entrepreneurial economy may fuel a resurgence that keeps our GDP per capita far ahead of China’s $12,900 (2014 estimate) for many decades. Let’s not forget that China has just experienced a stock market meltdown that’s been compared to Wall Street’s 1929 crash.
Eras do not fall neatly into century demarcations. But if the 20th century belonged to America — and there were bad decades in that century for America, like the 1930s — then the 21st century belongs to the global economy. With foresight, prudence and pluck, and a determination to not just accept the future, but to also shape it, this century could provide plenty of good decades for the United States.
To send a letter to the editor about this article, submit or check out our for how to submit by e-mail or mail.
