“Taking a defensive position presumes insufficient strength.”
-Sun Tzu-
In 2011, the proverbial Global Economic Table at which the world’s citizens sit and compete at is now notably constrained with so many new nations wanting a seat. Almost a comical metaphor, the Dinner Table notion should surely be recognized by citizens of Central Minnesota as one that tries to capture the evolving modern age of globalization. Recognition that many of the worlds dormant States and Peoples have all taken to the Tiger-economy mentality is only beginning to settle to some observers. As with such global growth, the social and economic roles of traditional economies like the U.S. wane in stride parallel to burgeoning economies now present in every quadrant of the globe. These “Tiger” economies are now rooted firmly in many nations other than the well-known BRIC nations, now solidly established in South/Central America, Pacific-Asia, the Middle East, and in various African nations as well. All these global hot spots of social and economic activity are bursting with the ferocious growth tendencies characteristic of post-war rebuilding programs: hyper-ambition, endless work-ethic, and a world class mantra towards betterment. These may be biased and glamorous words of endearment after the author recently finished a second tour of the Asia-Pacific region, but taken together they highlight the trending attitude and reality that is making for a much more competitive Table in our hometowns. Accordingly, residents of Central Minnesota must settle upon their community’s social and economic role and right at this competitive Dinner Table. These global relations are now of paramount importance and should be a mental priority for all citizens.
I brand this issue as of ‘paramount importance’ because reality suggests it is true. The overarching theme of this changing Global Table is the New Freedom emerging in the post information age. A New Freedom is emerging because of leverage. Traditional powers have less of it and emerging economies have increasing amounts. Leverage by way of healthy public debt burdens, growing investment in societal basics, and social influence and foresight. Leverage is a force-multiplier that has the power to both qualitatively and quantitatively lift national trajectories. Conversely, diminishing leverage becomes a liability. Liability via inflated and perpetual Current Account deficits, ballooning reliance on credit, and slighted trust of a nation’s economic fundamentals. Pre-financial crisis, U.S. banks had debt-to-equity ratios that reached 20:1. Meaning for every dollar of raw business-equity available they used 20 Dollars in debt. Unfortunately it is now written, that this leverage became a liability. I’ll not stray with musings on its results. What’s central here is how an economy leverages itself, for good or ill. Leverage must be used in search of positive returns, a concept once greatly heralded by the U.S., now it’s being practiced far better abroad. Reorientation is in order.
Economies and societies orientated towards high-return investments are an investor’s sure bet. They are the most rewarding leverage governments and peoples can work to acquire. Short and long-term actions produce a nation’s sustained competitive advantage (caveat: no CA ever truly sustainable). A notable paradigm to understand given that much of the developing world works on these exact principles, which the U.S. has long propagated across the world; economic pragmatism, free-trade, relentless pursuit of science/technology, and steady investment in the middle class, the sustenance of modern economies. These being the U.S.’ historical national creed, it is increasingly apparent they’ve fallen to second priority to conspicuous consumption and immediate economic gratification. Lengthy subsidies for dated industries, persistent fund cuts across the education spectrum, and narcissistic consumer behaviors. The remedy against these decade-old trends is much like both a small sailboat versus a large oceanic ship: some is quickly actionable while much is done slowly. These are social-economic investments, not quick-to-mend legislative story-lines or sound-bites and they are most often rewarding long-term. These exact principles created the entrepreneurship-inducing social safety net we enjoy, developed leading growth industries, and demanded an equitable system of supportive academics. So how does Central Minnesota place itself amongst this complexity?
As a result of U.S. keystone economic ideals becoming standard global practice, the economically available Table of St. Cloud and Central Minnesota is more competitive than ever. Jobs move, livelihoods segue, and towns fade or sustain in this world by the earnings release of every business Quarter. Galileo’s newly discovered round world is now more metaphorically Flat on all economic and social fronts, thus as local citizens our relation to these realities determines our future livelihood. Can we, as a region, stay focused on the importance of building our own long-term leverage so that we can have a continued seat at this Table? As a hometown Tiger, Husky and soon-to-be professional employee I hope so because local and national dialogue of the past ten years depicts mostly economic misunderstanding and petty infighting over irrelevant issues. Locally, steps should be taken to continually support the entire education system, by way of proper funding that endures economic volatility. It has never been more evident that a region, State, or Nation’s competitiveness explicitly relies on the quality of its education system. As such, St. Cloud State University is the single most important leverage the area holds. This evidence is part of our nation’s history and elemental to that of many modern emerging nations, specifically in Asia where we can learn lessons to get back on track.
A Final Dash of Salt...
Look to the East and further, for a rethink of how valuable our economic fundamentals can be. Many Asian nations have used them to build incredible international leverage and are now fiercely direct social and economic competitors to Central Minnesotans. Millions have been lifted from poverty, economy-sustaining middle classes (3 Billion by 2030) have solidified, and dictator-economies are outmoded. For most of the 20th century, Asian economies were trying to acquaint themselves with how to best use Western, innovative economic principles. They now have and are projected to be the masters and commanders of the current century and the increasingly Flat world. In this Flattened word in which the U.S., Minnesota, and St. Cloud now compete, it seems many have forgotten the basics of investment and as such have turned our vast historical leverages into liabilities. Taken together, this greatly affects our right to a healthy spot at the Global Economic Table and should be treated as such by everyone.
Further lite discussion from the Father of U.S./Sino relations...
Mj
