Joel Kurtzman - Unleashing the Second American Century: Four Forces for Economic Dominance

UNLEASHING

THE SECOND

AMERICAN

CENTURY

Copyright 2014 by Joel Kurtzman

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Book Design by Jack Lenzo

Kurtzman, Joel.

Unleashing the second American century : four forces for economic dominance / Joel Kurtzman.

pages cm

Includes bibliographical references and index.

ISBN 978-1-61039-310-2 (ebook) 1. Economic forecastingUnited States. 2. United StatesEconomic conditions21st century. 3. ManufacturesUnited States. I. Title.

HC106.83.K87 2014

330.973dc23

2013033299

10 9 8 7 6 5 4 3 2 1

To Robert L. Dilenschneider,
a man who always sees the bigger picture.

CONTENTS

The term the American Century was coined by Henry R. Luce, cofounder of Time magazine, in the run-up to Americas involvement in World War II. It was a term meant to reflect America taking its place at the center of the worlds stage, and not a span of time. But as the first American Century wore on, the country became dependent on other nations for its energyespecially its oiland ultimately for finances, too. Energy and finance are usually intertwined.

The second American Century is different from the first. It begins with America headed down the path toward energy independence, and ultimately to becoming an energy-exporting nation. It begins with America still leading the world in innovation, an America rich with capital in private hands and with a rapidly growing, highly productive industrial and manufacturing base. It begins with many other powerful but largely unappreciated attributes as well.

What will the second American Century be like?

If you take Americas powerful agricultural, industrial, high-tech, biotech, university, research, and military strengths, and graft onto them the energy abundance of, say, Russia or Saudi Arabia, you start to get a picture of what this new era will be like. As energy starts to flow in abundance from our wells, manufacturing will be returning to our shores at an ever-increasing pace. As an increased number of manufactured goods begin to be exported from the United States to the rest of the world, money will begin pouring back into the country. With that, over the long haul, Americas finances will rebound.

If you add to what I just described the resources of our two North American Free Trade Agreement (NAFTA) partners, Canada

The unimaginable wealth of the United States is about to be unleashedagain. It happened in the twentieth century, particularly in the aftermath of World War II, and it is beginning to happen now. Back then, as our troops came home from a horrendous overseas war, they returned to a country whose national debt was a staggering 120 percent of gross domestic productan all-time highas a result of the Great Depression and World War II. Our soldiers returned home in need of jobs, places to live, and education. They returned to a country in need of a new infrastructure of roads, bridges, rail lines, airports, pipelines, and ports. They returned, that is, to a country that is much like America today.

So what happened next?

A massive wave of growth, for roughly sixty years, with only brief interruptions. Along with that growth, there was the unprecedented development of our universities and of our scientific and technological capabilities, the emergence of brand new industries, the exploration of space and of the worlds inside our bodies and our cells. During that time, America was transformed.

As we go forward, Americas future looks just as bright. The Great Recession and the housing crisis caused tremendous pain and disruption, but they also cleansed the system of excess. The government may be burdened by debt, but the private sector, and millions of Americans, have been sitting on their cash. A lot of cash. And soon they will begin to spend. In place of recession and crisis, we will face a period of renewed growth, with a new sense of optimism about the future.

So when will that growth start happening?

It is happening now in some parts of the country. Take a trip to North Dakota, or Cambridge, Massachusetts, or Silicon Valley and San Francisco, or Austin or Houston, or New York City, and you will see the seeds of growth taking root. Soon that growth will be happening everywhere.

That growthand the new century it will usher inis the subject of this book.

This book was conceived out of my frustration with the ill-informed statements made by so many of the candidates for office during the 2012 election cycle. Its not the first time people have made erroneous assessments regarding the United States and its prospects. Almost from the start there were politicians and pundits who counted us out. But during those recent campaignsthe national one for the presidency as well as ones conducted on the state and local levelwe heard claim after claim that our best days were behind us. One phrase in particularWe dont make anything here anymoremade me extremely weary.

Candidates who should have known better, who should have understood more about the American economy and our role in the world, were mindlessly repeating a statement that made people nervous, made them doubt our place in the world, and made them pessimistic about the future. Worse, it just wasnt true. Commentators, pundits, and other so-called opinion leaders repeated it as if it were a mantra.

China was surpassing useating our lunch was how a lot of them put itand the United States, and perhaps all of the Western world, was more or less doomed. Then, of course, they added that all of our ills were to be blamed on the people and policies of the other political party. Its difficult to remember another time when so many cheap shots were fired and so many uninformed statements made.

While all of this nonsense was taking place, the streets were filled with protesters of all ages in lawn chairs (apparently the preferred method of protest these days). Members of the Tea Party vied with members of Occupy Wall Street for media time.

But as I listened to their arguments, and in a couple of instances talked to members of these groups, it soon became apparent to me that none of them really knew what they were talking about. Their own situations may have ranged from difficult to wretched, but did the personal difficulties of some people mean that an entire country, all of the United States of America, was wretched as well? Was the United States really in as bad a shape as these people said it was?

From where I sit, as a senior fellow at the Milken Institute, a nonprofit, nonpartisan, economic think tank (although the opinions in this book are entirely my own), and from my board-level relationship to The Wharton Schools SEI Center for Advanced Studies in Management, I have access to an unusual array of data, facts, and other kinds of information, and, most importantly, to some of the most brilliant and insightful people in the world.