The Real Crisis Maimon Schwarzschild

Claudia Rosett has it right, as usual.  There have always been crises, financial and otherwise – you cannot name a decade when there haven’t been.  But

America over the years has found ways not only to cope but to lead the world into an era of extraordinary opportunity and progress. Thanks to creative destruction, productivity has taken off in ways hard to measure but clear to anyone who surfs the Web for news or browses the global markets for merchandise from places that two generations ago were barely on the map.

This has chiefly come courtesy of innovations wrought under America’s system of democratic capitalism – protected by that gun-slinging tendency, at least in a crisis, to stand up to enemies. Markets may be careening right now, but the current bust follows a boom in which, according to the International Monetary Fund’s latest figures, global output – measured in terms of purchasing power parity – had soared by 2006 to above $60 trillion per year, or roughly double its average during the 1990s.

The biggest beneficiaries have been in the developing world. According to the same IMF tables, growth rates for emerging economies these past four years have been roughly 6%, or almost double the average rate during the 1990s (and almost twice the growth rate for advanced economies)…  It has translated into better housing, clothes, medical care and communication with the wider world and more know-how for further progress.

Yet

These advances came during the era in which America was increasingly reviled – especially by many of its own elite – as the lone superpower, the sinister and stingy Santa of a unipolar world. Now we keep hearing that the current turmoil represents a failure of U.S. capitalism and the much-awaited end of the American era.

From Barack Obama, now closing in on the White House, the mantra is “change.” His promise, given an intoxicating kick by the immediate crisis, is to complete a transformation now fitfully begun, from compassionate conservatism all the way over to the flabby cradle-to-grave guarantees of socialism, partnered with a foreign policy built around diplomatic charm.

That promised sea-change of the basic American ethos is the real crisis. There will be hell to pay, to the extent that a panicked U.S. – hounded for years by its critics at home and abroad – succumbs to the idea that democratic capitalism will no longer serve, that creative-destruction must be staved off at any cost, that enrolling in a kumbayah chorus can change the nature of mankind.

The biggest bills may fall first on the developing world. And far from preventing turmoil and devastation, “change” is more likely to strip America of the agility and means to cope when the next crisis comes.

Read the whole thing.