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America Is Headed Toward An Age Of Descent: Edward Luce

To the rich and growing literature of American decline we must add, Time to Start Thinking: America in the Age of Descent, by Edward Luce. Luce, the chief U.S. columnist for the Financial Times, is British but has spent many years in the U.S. (He wrote speeches for then-Treasury Secretary Larry Summers in the late 1990s.) Like a modern day De Tocqueville, Luce took some time off to travel around the U.S. for several months. And what he saw left him profoundly concerned for the future.

He saw a middle-class being hollowed out, declines in once-great cities like Detroit, the loss of manufacturing jobs, busted education systems, and a political system paralyzed by bitter partisanship and an inability to get things done. While not predicting America's collapse, Luce is "skeptical about America's ability to sharply reverse her fortunes."

It's ironic that Luce shares a last name with the one of the great champions of America's future—Time, Inc. founder Henry Luce. That Luce famously proclaimed that the 20 century would be an "American century." By contrast, Edward Luce has a tough time imagining how the 21st century will be kind to the United States. Luce doesn't believe the U.S. is going to pitch into a prolonged depression now. Rather, he sees the U.S. falling behind international competitors on a relative basis.

We must examine America's plight "in the context of the rise of others, and of the challenges posed by rapidly exponentially changing technology and globalization, and the challenges they pose to the middle class and their relative skill set in this world," Luce says.

Luce locates the problems primarily in the public sector — not the private sector. "My pessimism doesn't stem from the natural energy or the entrepreneurial abilities of the American people. I don't think that has declined," he said. "My pessimism is really directed toward its political economy, and in particular to Washington's response to the challenges." He notes that the political system hasn't dealt with fiscal and budgetary issues. Congress's failure to do "routine things, like funding infrastructure building" or provide support to the Export-Import Bank leads him to be pessimistic about the system's ability to do the big things required.

The book, whose conclusions I don't necessarily share, is an, um, lucid, reported tour d'horizon. It provides an excellent snapshot of America in 2010 and 2011, a country grappling with serious issues and unsure about its place in the world. Luce introduces us to CEOs, economists, analysts and workers who fret about the future. We meet Dan DiMicco, the "fire-breathing chief executive" of steel maker Nucor, who rails against Washington's indifference to manufacturing, Segway founder Dean Kamen, and a host of officials in Michigan. Without ideology, nastiness, or partisanship, Luce presents a well-written, insightful critique of the American system. To my mind, he doesn't give sufficient credit to the private sector's ability to adapt and prosper in a changing world, to the policy successes we have seen, and to America's continual outperformance of the rest of the developed world. (Hello, Europe! How's that austerity thing working out for you?) Still, after I put down Time to Start Thinking, I did think it might be time to start drinking.

Daniel Gross is economics editor at Yahoo! Finance

Follow him on Twitter @grossdm; email him at grossdaniel11@yahoo.com

His next book, Better, Stronger, Faster: The Myth of American Decline and the Rise of a New Economy