…that’s at least what David M Smick, founder and editor of the International Economy magazine, writes in Washington Post editorial today, from the article:
Here’s a prediction: The political party that controls the White House after January could, four years later, be out of power for a generation. The economic challenges are that daunting.
His thesis turns on the crack-up of globalization, the end of a model that has operated since the late seventies to lift much of the developing world out of poverty, vastly enriching the developed world in the process.
I think he’s got things about right. This era feels eerily similar to that of the early twentieth century, when globalization driven by European nationalism and imperial ambitions, yielded enormous economic growth. That era saw industrialization finally reach fruition. In this era, developments in information and communication technologies have finally borne fruit. But the technological engine is fading, and there is nothing to take its place.
Maybe this time, once growth stalls, there won’t be the impulse to apply the technological advancements to advantage in large-scale conflicts. But the history of mankind suggests otherwise; no matter how much every little hipster believes otherwise, these times are no different than the any other.
Of course, neither of the candidates for president talk much about the decline of globalization as the world’s economic growth engine. Smick offers a possible reason why:
So despite its flaws, globalization has been a wealth-creating machine. That is why the world’s governments spent $15 trillion and central banks increased their balance sheets by $5 trillion in response to the financial crisis, essentially to try to save that machine.
Yet the globalization model is cracking up anyway — and there’s no replacement in sight. Instead of addressing this dangerous tectonic shift in world economic affairs, our candidates in the debates have offered generalizations about “more government investment” and “tax reform.” There’s a reason for this fascination with the diversion of simple bromides. While jabbering away, each can avoid thinking about a terrifying possibility: that he might win in November.