Is the US still a Giant the right question?

The plenary session of Wednesday evening August 27th at the MEDEF’s Université d’Ete was entitled: Is the USA still a Giant? And the star-filled panel gave a very vivid and resounding yes to the question, with the normal and logical set of qualifications. For purposes of this post, I have three angles regarding this plenary session.

First, the highlight comments and perspectives. Second, what was missing from the debate. Three, a quick review of the panel format and an informal scorecard on the quality of the speakers. The highlight comments and perspectives (comments are paraphrased from French into English).

• From Ms. Christine Lagarde (Minister of Economy, Industry and Employment) Despite the quadruple crisis that America is undergoing today (rising imports, housing, finance and currency), the chances are that the US will come out of the crisis in better shape. Ms Lagarde cited the American’s ability to appreciate the value and role of failure, referring to the startling example of Donald Trump who has been up and down a few times. [Same for Martha Stewart?]
• Again from Ms Lagarde: Why is the USA able to reinvent itself? Because the USA is not based on a rigid “model” (as in France), but on values, values that are fluid. Ms Lagarde cite three key values: self-esteem, [with a plug for the high level of R&D where over 6% of GNP is invested in private or public R&D – citing the strength of Harvard, Stanford and Berkeley]; the genuine sense of welcome and integration of the immigrants; the instinct to give back, where 10% of the wealth is given back to charities.
• Loic Lemeur, CEO of Seesmic, his 5th startup (inveterate e-entrepreneur). Through a number of interesting anecdotes, Mr Lemeur managed to get our attention with verve. He cited paying for a billable one-hour chat with Daniel, an online consultant – and Daniel turned out to be a 14-year-old entrepreneur. Mr Lemeur resumed the existence of the 14-year old entrepreneur in the US because Daniel has entrepreneurial icons, such as Steve Jobs, Steve Case, Steve Ballmer up to whom he can look (though they don’t all have to have a first name Steve).
• Again from Loic Lemeur who said that the notion “How can I help you?” is embedded in the American’s personality. And, Mark Zuckerberg, founder of CEO of Facebook tendered out the same help and delivered… A nice spirit of collaboration.
• Stuart Haugen, CEO Of Certus Executives, VP of Republicans Abroad, gave a very “American” and thoroughly positive rendition of the US’ long term health, citing Mark Twain: “the rumours of my mother are considerably exaggerated.”
• David Ignatius, journalist from The Washington Post. Mr Ignatius talked about the demise of the MSM (Main Stream Media) at several occasions and rued the end of privacy and intimacy. He also stated that America is too big to take care of so many problems that are so small (such as Kosovo). Yet, is so small to take on the truly big problems (notably Global Warming). Mr Ignatius said that the question is not whether the US is a big giant… but how big a giant should the US be? The real question is how to be the “right size”.
• Finally, Mr Ignatius talked about the need to “turn the page”, but intoned: “yes, but the page of which book?” A nice way to plug the arrival, next week, of his new book, co-written with Zbigniew Brzezinki and Brent Scowcroft: America and the World: Conversations on the Future of American Foreign Policy.” (Buy here on Amazon).

As for my own insights on the subject, I feel that the panelists did a good job of explaining how the US has become a Giant and the underlying reasons why the US has managed to rebound so vigourously from prior recessions. However, as much as I believe that the US will indeed bounce back from the current troubles, the issue is not about the US’ ability to recover. The real questions are whether the US can ensure its’ long-term, structural health. Any decline of an empire happens deceptively and over a longer timeframe: that inevitably makes it hard to “predict.” For me, there are two key points:

1. how to improve the education system in the middle & high school levels (the “100% positive” approach for the toddlers on the one end and the excellence of the university system sandwich a vastly inferior middle & high school product). The University product is open to the world, and the world (read Asia) is taking full advantage. The challenge is educating “middle America.”
2. how to create a healthier USA? The medical system has, once again, excellence at the top end. However, the health of the average American is poor and his/her ability to have proper health care is limited and/or expensive. There are two underlying points that need to be reviewed in parallel: teach Americans to eat better and limit the lawsuits. The level of investment in medicine and medical services is virtually double the level in France; however, there is too much waste and wasted efforts.

Finally, a quick comment on the format of the panel and a review of the panelists. For this conference of two hours, there was barely time for one question at the end — and certainly none from the audience (although I would have wanted to get one in). Rather than a debate, the evening plenary session was a string of 9 different speakers, delivering their point of view on the question. To some degree, the request from Mr Christophe de Margerie, CEO of Total, to have the USA help Europe, summed up the usefulness of the plenary session. What are the lessons to take from this session? On the one hand, there is a need to find some structural solutions to the problems in the US in order to allow for a true long-term health, so that the famous “decline of the empire” does not materialize. With a stronger US, it will be less doubtful (as Mr Dominique Moisi suggested) it will be better able to help outside its borders. And, in the upcoming Presidential elections there is a lot riding on the victory of Obama : including:

1. really tackling the fundamental issues of education and health care;
2. opening the door to minorities [including women] in future Presidential races, with a trickle down in other political and non-political domains;
3. and seeing if such a critical election encourages a larger percentage of the American electorate to participate in the largest democracy of the world. And, then, on the other hand, there are the practical actions that France could take to help “change” its own future. And, on this, I certainly didn’t get any implementable solutions.

And, lastly, rather than make a person by person grading on the quality of the speeches, I note, with irony, that among the least exciting presenters were the two Americans (notwithstanding that they were both speaking in French), Mr Ignatius and Mr Haugen, along with Mr de Margerie. The most invigorating speech came from Loic Lemeur, with some pertinent anecdotes, which received several rounds of applause. But, the best speech came from Ms. Christine Lagarde who, freed from having to speak once again about the morosity of the French economy, was brilliant and pertinent in the 15 minutes she was accorded at the opening.