You might have heard: America doesn’t win anymore. We keep doing bad deals with the rest of the world. It’s time to make America great again.
Those, of course, are the touchstones of Donald Trump’s presidential campaign, which many of his competitors have picked up on--since it seems to be working for Trump. The latest Republican presidential debate sounded like a eulogy for the dearly departed United States of America, b. 1776 - d. 2015. "This country's headed in the wrong direction," Marco Rubio said during Wednesday's CNN debate. "This nation's possibilities and potential are being crushed," Carly Fiorina lamented.
Yet there are plenty of reasons to be optimistic about the world's poster child for capitalism. First, the U.S. economy is once again the world’s dominant engine of growth. The unemployment rate in Europe is 10.9%, more than twice what it is here at home. Germany’s rate is lower than America’s, but that’s with super-unions and elaborate worker protections that would never fly here. Japan is still trying to emerge from a 20-year economic stupor. There are pockets of the developed world that outperform the U.S., but no big economy is doing considerably better and most are doing worse.
The dilemma faced by the Federal Reserve illustrates the relative strength of the U.S. economy. Central banks everywhere have binged on easy money during the last five years. But the Fed is the only one on the verge of tightening. That’s because the underlying economy here is ready for it; in other countries, the economy is still too fragile. Europe and Japan may ease further, in fact, to continue nursing their ailing businesses and consumers.
China, which could become a superpower some day, has spent much of 2015 trying, and failing, to prop up stock prices in its still-not-ready-for-prime-time markets. The communist nation’s leaders are still learning the basics of supply and demand while desperately seeking scapegoats to blame for the normal market declines that follow an artificially inflated bubble. China is not winning at America’s expense. It’s floundering and hoping nobody will notice.
As for the cheap imports we get from China and all the money it loans to the U.S. Treasury at record-low interest rates, that benefits the United States more than China. Politicians don’t want you to know that, because they need China as a bogeyman. But there’s a reason GDP per capita is still 7 times higher here than in China.
U.S. corporate profits have risen by 26% since the beginning of 2010. Corporate profits in the rest of the world are up by just 6% during that time. U.S. multinationals get about 45% of their revenue from overseas these days, so their performance doesn’t directly reflect that of America as a whole. But if you bet on American businesses at the end of the last recession, you won big.
Various elements of the U.S. economy remain the world’s standard-setters: technology from Silicon Valley, films from Hollywood, music from Nashville, even, once again, vehicles from Detroit. You can’t win at everything, all the time, but the home team still chalks up impressive wins in many of the divisions we compete in.
America still has plenty of problems, starting with a political class motivated by self-gain above national interest. Trump, Democratic presidential candidate Bernie Sanders and other candidates have clearly tapped into disgust with political elites who seem worlds away from the citizens they’re supposed to represent. And compared with its own glory days from 1960 to 2000 or so, the U.S. is underperforming, with growth slowing, wages stagnating and national leaders failing to devise solutions.
But that’s not losing. Americans like to think of winning the way we experience professional sports—as a defined outcome with a score, a victor and a vanquished. But that’s not how you win in the real world. It’s not how you win in diplomacy, in the economy, or even in war these days since nobody has the appetite for the prolonged occupation of foreign territory that must accompany traditional military victory.
True wins don’t even announce themselves much of the time, because there’s not always a loser and there may be no score at all. That’s what happens when the economy grows and most people end up better off, on the whole. Just about everybody wants to win. Sometimes the only thing missing is knowing when you have.
Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial and Political Freedom. Follow him on Twitter: @rickjnewma .