I just became prime minister of Italy, and our economy has a minor problem: it is disappearing. Only 10 years ago we accounted for almost 5% of world trade, but we are losing market share to Asia, and our share of world trade has fallen to barely half that level. Our family firms are disappearing because Italians lack entrepreneurial spirit. Why, every factory manager still goes home to his mother’s for lunch! China can make a slightly inferior but much cheaper version of anything our factories can produce. What should I do?
Romano in Rome
Your question implies its own answer. You think the problem is that Italian factory managers insist on having lunch at their mother’s. Have you considered that the Italian mother’s value on the world market has risen by more than the value of an Italian factory has fallen? If you can’t sell commodity industrial products, sell the culinary art of the Italian mother, refined over centuries of pampering spoiled sons.
Eight hundred years ago, China exported an inferior product to Italy, namely noodles, and Italy turned this into a high-end product, namely pasta. The Chinese might be making cheap knock-offs of your industrial products, but they spend their discretionary income on your improved version of their own invention. Shanghai has adopted osso buco alla Milanese as its regional dish. The market for gremolata in Shanghai alone probably exceeds the global turnover of industrial valves. Flash-freeze Italian Sunday dinners and air-freight them to China. Busloads of Chinese tourists will descend on the factory towns of northern Italy to eat a home-cooked Italian meal.
Of course, this is only an interim solution, for Chinese cooks will learn to prepare Italian food as well as the Italians, just as Chinese musicians will learn to play the Viennese classics as well as the Viennese. But you needn’t worry about a long-term solution. Not only are your family firms disappearing; with a birth rate of barely 1.2 children per female, your families are disappearing as well. But don’t worry. When you Italians become extinct, your culture will be in good hands.
Remember me, the chief executive officer of the world’s only hyperpower? Last November you told me to sit tight and not do anything. Since then my approval rating has fallen from 37% to 31%, and things are getting worse by the week. Sounds like you gave me some pretty bad advice. What do you have to say now?
Worried in Washington
First of all, don’t take it personally. If you think you have it bad, read the letter from Romano in Rome above. French Prime Minister Dominique Villepin’s approval rating dropped to only 20% last week, and Britain’s Tony Blair is barely ahead at 26%.
The trouble is that the world faces problems no government possibly can solve to the satisfaction of its people. That’s why there are no popular leaders, except for the new chancellor of Germany. But that’s only because the Germans are slow on the uptake.
Your trouble is that you are too nice a guy. You like to give people good news. Now it’s time to start telling some bad news to the citizens of your hyperpower. They already have gotten the message at the gasoline pump. Even worse for your party, it’s the swing voters who are the angriest. Poor folk will vote for the Democrats, and high-income people can afford to vote their ideological preferences.
The thick middle of the distribution contains the families who give up the cinema or a restaurant meal when it costs US$60 to fill the tank of their sport-utility vehicle. Remember, between 2001 and 2004, median family income in the United States actually fell by about 4%, and wages fell by more than 6%. Families at the center of the income distribution earned $54,700 in 2001 but only $53,600 in 2004, and the past year and a half of improvement probably got them back to where they were five years ago. A New York Times/CBS poll found that more than half of respondents have cut household expenditures in response to higher oil prices.
No matter what you do, things are going to get worse before they get better. You’re better off being the first to break the bad news. I suggest a speech along the following lines:
My fellow Americans, we didn’t seek to become the world’s only hyperpower. We kind of stumbled into the role because everyone else failed at it, or just didn’t want the job. As long as we are on top of the heap, we’re going to have problems.
Now, these are high-class problems to have. A big one is all the people who want to get into this country. It’s better to have people fighting to get in than to have people fighting to leave, but we still need to address it. A much bigger problem is jealousy. We are the world’s biggest success, and all the deadbeats of the world try to blame their problems on us.
The president of Iran just wrote me a letter telling me in so many words that if we don’t convert to Islam there will be war. Iran is making a move to grab control over as many oil resources as it can. That’s why they want nuclear weapons. And that’s why gasoline prices are so high. I’m sorry that this has made life worse for you. But if we don’t stop Iran, we will have much bigger things to worry about than gasoline prices. We’ll be picking plutonium out of our posteriors.
And one thing more: we can’t fix everyone’s problems, and we can’t force them to adopt our democratic values. We will put our boys in harm’s way to help our friends and deter our enemies, when it suits our interests, but we can’t take responsibility for the outcome of other people’s politics.
Convince the voters that Iran is the source of their troubles. Get your soldiers out of Iraqi cities and into secure bases, which I understand you plan to do in any case. Then take out Iran’s nuclear capabilities later this year. Why not launch the attack on Halloween? “Trick or treat” seems an appropriate response to President Mahmud Ahmadinejad.
This strategy may seem risky. But what have you got to lose?