Global New Deal
Brown, Gordon, Newsweek
Byline: Gordon Brown
Gordon Brown's manifesto to save America--and the world economy.
Weeks of rhetoric and political maneuvering over the debt ceiling may have been resolved, but the larger question remains unanswered: how will America revive its economy?
We are at a precarious crossroads. America's path to growth through higher consumption is blocked by high personal borrowing and negative equity. Another well-trodden road out of recession--a private investment spurt--has failed to materialize as businesses hoard cash in the absence of a growing home market.
And now that the debt deal will forestall the other traditional path--a stimulus from public investment--just one route to sustained growth remains that can prevent a decade of high American unemployment.
This is to do what America has always done best: mobilize its entrepreneurs and its producers of ideas, patents, and new technologies--and export its high-value-added, technology-driven consumer goods to the rest of the world.
But this trade and jobs boost cannot be achieved unilaterally. The climate for higher U.S. exports depends on higher growth elsewhere and on the rest of the world's willingness to buy foreign goods.
So President Obama should now refocus his attention on securing a global growth pact that will free the world as a whole, and particularly the West, from years of anemic growth.
Instead of the dime-a-dozen "plans for America" that are no longer worth the paper they are printed on, November's G20 summit should be presented with something far bolder: "America's plan for the world economy"--to achieve for global trade and growth now what Gen. George Marshall's plan did for the faltering world of the 1940s.
What I would call a "global New Deal" would create American jobs by playing to American strengths--enabling the country to exploit its still strong lead in ideas, high-tech and brand-name products, and its location as a global magnet for new talent, drawing thousands from around the world to enlist in its university campuses and to join its startup businesses.
This new deal is not just an option: it is a necessity. Today, 60 percent of China's income comes from exports, while America's export share is just 25 percent. This troubling gap has prompted the president to call for Americans to answer what he has coined the U.S.'s "Sputnik moment"--the realization that Americans have lost their global competitive edge--with a "man-on-the-moon moment": America mobilizing its genius to once again lead.
The need is urgent because as Asia's middle classes double in the next decade, its consumer market will dwarf all others, accounting for 40 percent of all global consumer spending. Without a bigger footprint in Asia, America will be left behind.
And if--as predicted--India, China, Brazil, South Africa, Mexico, Turkey, South Korea, Indonesia, and Russia, which today buy just 15 percent of U.S. exports, account for 70 percent of future global growth, then no American company can afford to stay at home.
How can Obama sell America's global growth plan to other countries? By demonstrating that each country will achieve its own objectives only through a higher level of global trade and growth. …