Last month, in a hotel gift shop in Athens, Greece, I started talking with the clerk about how expensive things were for Americans in light of the dollar’s plunge against world currencies. My visit to the corner Starbucks for a latte, bagel, and two morning papers had set me back $23. She remarked in her best English, “It’s so confusing, your currency. The U.S. is the best in everything, so why is your money worth so little?”
Certainly, the dollar is not in good shape. It is at a 26-year low against the British pound, having fallen 44 percent since February of 2002. It’s at a 30-year low against the Canadian dollar and an all-time low against the euro.
I associate weak currencies with weak countries and strong currencies with strong countries. Why, then, has the greatest economy on earth watched its net worth as a nation decline by nearly 50% since 2000?
If America is still “the best in everything,” the current weakness in our currency is probably temporary. Ten years from now we may see the dollar once again strong on a global basis. But what if we are no longer “the best?” What if our falling dollar is the beginning of a new trend?
Could it be our nation’s economic greatness is more a perception from the past than a fact of the present? Some alarming new statistics suggest this may be the case. A number of trends would indicate the rest of the world has embraced the economic thinking and policies that made America great.
According to an article in USA Today, eight of the 20 largest global initial public offerings in 1996 were listed on a U.S. exchange. So far in 2007, not one of the top 20 global IPOs is listed in the U.S.A. “Things are bad and getting worse,” says Hall Scott, a Harvard Law School professor. He blames the trend on the regulatory environment and excessive litigation risk.
We are beginning to get beat at our own game. Capitalism is slowly becoming a politically obsolete theory in America, while it is on the rise globally. One example of this is that Americans are becoming more and more nationalist in their thinking.
A recent Pew poll asked respondents their opinions of growing trade ties between countries. Those from the U.S. ranked dead last (59 percent) in regarding such ties as “very good” or “somewhat good.” The next lowest ranking, 69 percent, came from Egypt. Americans believe, more than any other country on earth, that foreign goods and services are unnecessary and even unwanted.
This is a paradoxical attitude from a country that is a net importer, relying on foreign oil and goods to fuel its consumer-driven economy. If anything, one would think that Americans would be leading the global parade in supporting trade. We once were, but no more.
So it should come as no surprise that, when the Pew survey asked if trade with foreign companies had a positive impact on a country, only 45% of Americans answered positively, placing us in the bottom five nations. “We expect the world to welcome U.S. companies with open arms and yet do not reciprocate the hospitality,” writes Fareed Zakaria in Newsweek’s October 22 issue.
Maybe the clerk in Athens was mistaken about the U.S. still being “best in everything.” If so, I hope we quickly wake up to that fact so we can do something about it. Unfortunately, social anthropologists tell us it takes 15 years for society to integrate the recognition of a change. My fear is that we’re in for a rough ride before we begin to regain our economic strength.