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Global Economy

Thomas Friedman and Fareed Zakaria bring global perspective to Conference
By Rick Haglund
Page 16-18, May 2012

Globalization and rapid technological advancement are the two most powerful trends shaping and roiling today’s economy, especially in Michigan and Midwest manufacturing states that compete with China and other fast-developing nations.

Few people explain the implications of those forces better than New York Times columnist Thomas Friedman and Fareed Zakaria, a Washington Post columnist, TIME Magazine editor-at-large and host of CNN’s “Fareed Zakaria GPS” public affairs television program.

“The two of them have understood that a flattening world, driven by globalization and technology, is fundamentally different than the past,” said Lou Glazer, president of Michigan Future Inc., an Ann Arbor-based
think tank.

“It’s spectacular that they’re both coming” to address the Mackinac Policy Conference, he said. “I give Sandy Baruah and the Chamber a lot of credit for inviting them.”

Zakaria’s session, titled “Global Marketplace: Innovation Drives Success” takes place on May 29. Friedman will speak on May 31 in a session titled, “Staging a Comeback: Michigan’s Role in the Economic Transformation of America.”

Friedman, the Pulitzer Prize-winning foreign affairs columnist for the Times, became widely known in 2005 after his provocatively titled book, “The World is Flat: A Brief History of the Twenty-first Century,” topped best-seller lists.

Friedman’s assertion that the world had become flat pointed to the fact that the Internet and other technologies had nearly eliminated the barriers to entry into the world economy and leveled the playing field for advanced and developing nations.

He wrote that he came to this conclusion after visiting Infosys Technologies, an Indian information technology company that was managing its global operations from a conference room using the latest in digital video technologies.

“Clearly it is now possible for more people than ever to collaborate and compete in real time with other people on more kinds of work from more different corners of the planet and on more equal footing than at any previous time in the history of the world—using computers, e-mail, networks, teleconferencing and dynamic new software,” he wrote.

Friedman updated the book in 2007, retitling it, “The World Is Flat 3.0: A Brief History of the Twenty-first Century.” (It is interesting to note that Gov. Rick Snyder is calling his efforts to reinvent the state “Michigan 3.0.”)

His latest book, “That Used to Be Us: How America Fell Behind in the World It Invented and How We Can Come Back,” co-authored with Michael Mandelbaum, a foreign policy professor at Johns Hopkins University, calls for government investments in basic research, transportation systems and education, while acknowledging that overall spending must be reduced to balance the federal budget.

“Anyone who says we can forgo spending of this kind does not understand either American history or the world in which we are now living,” Friedman and Mandelbaum wrote.

They say more effective business regulations and a welcoming attitude toward immigrants also are needed for the United States to prosper in a globally connected economy.

Snyder has said attracting more immigrants, who tend to start new businesses at a faster rate than the overall population, is critical to boosting Michigan’s economy. But opening the borders to more foreign-born residents remains a controversial issue.

Investing in infrastructure—including roads, bridges, airports and rail—and work force skills, also is a recurring theme of Zakaria’s.

In a recent Washington Post column, Zakaria said President Barack Obama should spend less effort on taxing the rich and reducing inequality, and more on selling the need for investing in the country’s economic future.

The so-called “Buffett Rule” on taxing millionaires, named for billionaire investor Warren Buffett who said the rich should pay higher taxes, “does not deserve the attention Obama is showering on it,” Zakaria wrote.

Instead, Zakaria said the President should push his “economy built to last” theme, which has languished recently. In his State of the Union speech in January, Obama called for spending to boost manufacturing, develop new energy sources, improve infrastructure and make college more affordable.

“He should ask Americans to choose between a theory that says these investments will create long-term growth vs. the notion that cutting government budgets will be enough to ignite growth and employment,” Zakaria wrote.

Zakaria also won acclaim for his 2008 book, “The Post-American World,” which was updated last year. In it, he argues that China, India and other countries have adopted the United States’ formula of democracy and capitalism to beat us at our own game.

While America remains a political and military superpower, “in every other dimension — industrial, financial, educational, social, cultural — the distribution of power is shifting, moving away from American dominance,” Zakaria wrote.

That should especially concern business and political leaders in Metro Detroit and Michigan, said John Austin, president of the State Board of Education.

“We’ve not been willing to figure out how to pay for roads, bridges and cyber investments,” said Austin, who also is a nonresident senior fellow at the Brookings Institution. “And we have been de-funding our great universities.”

The investments and political changes Friedman and Zakaria call for are “the opposite of what we have been doing in Michigan during the past 10 years,” Austin said.

Gov. Snyder’s proposed fiscal 2013 budget ends the deep cuts to Michigan’s 15 public universities, but requires them to meet certain performance benchmarks in order to receive more money from the state.

He also has proposed increasing fuel taxes and building a new bridge linking Detroit and Windsor, Ontario, Canada. But those measures have been resisted by the Legislature.

Of the two journalists, Friedman is perhaps the most controversial because of his views on global warming, energy policy and the auto industry.

Friedman has proposed setting a floor price on gasoline at about four dollars a gallon, in numerous columns. The resulting increase in fuel taxes would be used to develop cleaner sources of energy that would ease global warming and reduce America’s dependence on oil from the Middle East.

In one 2008 column, as the federal government was preparing to bail out General Motors, Friedman said any aid should be dependent on GM developing a plan for all its vehicles to be gas-electric hybrids also able to run on next-generation cellulosic ethanol.

Friedman and Zakaria don’t pull punches in describing global and technological forces and explaining how those transformations are changing America’s economy.

“Both Zakaria and Friedman have been very clear in their observations about the global economy and Michigan’s place in it,” Austin said. “It’s important for state government and particularly the business community to hear what they have to say.”

Rick Haglund is a Metro Detroit freelance writer and a former staff business writer/columnist for the MLive Media Group.