America still wields clout despite Trump
If you think of the US as a global leader, these are troubling times. This G20 meeting showed how weak the US has become. At a big international summit, the president seems uninterested and withdrawn.
But America is not now and has never been a homogeneous country with universal shared values. And while perhaps the shrinking part of America that Trump represents may seek to go its own way, the growing parts of America that represent the future are likely to redefine a 21st-century version of global leadership.
In the years following the Second World War, Europe’s and Japan’s economies were in ruins. Mostly unscathed by war and economically empowered by wartime production, the US inherited its position as the world’s dominant superpower. Industrial-era cities were at their high. Factories were booming.
The parents of baby boomers were expanding into the suburbs, financed by government-backed mortgages and new highways. We had visions of man setting foot on the moon.
For parts of America, much has gone wrong since then. Europe and Japan rebuilt their economies, and the rise of China and other emerging markets led to competition for American manufacturing jobs. Outsourcing and productivity improvements slowly hollowed out America’s factories.
Continued domestic migration south and west, along with lower fertility rates, put demographic strains on the Northeast and the Midwest. Highways may have been a boon for the American economy, but communities far from them slowly became economically irrelevant. In stagnant communities, strains from pension costs and ageing infrastructure have led to a host of financial, social and political challenges.
The shock of the 2008 financial crisis was a body blow from which many communities are still reeling. The election of Trump was a response to all of this.
Globalisation and demography certainly created American losers — to borrow Trump’s terminology. But those forces also created winners, who represent America’s future. Whereas postwar population growth was somewhat homogeneous — white families settling into newly created suburbs — today’s population growth has a decidedly more diverse, global look.
Ongoing trends in the global economy favours these parts of America as well. Think ahead 20 years to when millennials are running the world. Solar energy should represent a much larger share of global energy consumption, with oil far less important.
This is great news for energy consumers like the Sun Belt, and bad news for hydrocarbon producers like Russia and the Middle East. The role of technology should continue to increase, with West Coast American companies like Google, Apple, Facebook and Amazon better-positioned to capitalise on these trends than anyone else in the world.
The development of autonomous vehicles could help unchoke traffic gridlock in sprawling car-dependent metro areas in the South and the West.
As the global economy continues to shift from manufacturing to services, US media, content and culture have more and more influence around the world. Whether it’s the aforementioned technology companies, Hollywood, Disney, global brands like Nike and Starbucks, or athletes and musicians like LeBron James and Ariana Grande, here too America has unparalleled dominance.
The US continues to have the largest, deepest and most transparent capital markets in the world, with Wall Street banks in their best health in decades. As the emerging world like China becomes wealthier, it also seeks to become more educated. Here, too, America is poised to thrive. One of the noteworthy aspects as China is supposedly set to wrest the global leadership mantle from the US is that those in China with the means to get out want to buy real estate in the US and send their children to US schools.
And then there is the matter of demography. Europe, Russia and Japan have shrinking populations. China’s working-age population has already peaked, and is set to decline by 90 million by the year 2040.
The only large and powerful nation in the 21st century that has a reasonable birth rate and is also an attractive destination for immigrants is the US.
Trump’s America, with its backbone as factory towns in the Midwest, may be in decline. But America’s future, one based on thriving, diverse Sun Belt metropolises like Los Angeles, is poised to lead the world of the future.