“No country in the world has better prospects and a more globally important role than the U.S.,” said former Director of the White House National Economic Council, Larry Summers, at a panel called “Where Is The Global Economy Headed?” held yesterday at the Israeli Presidential Conference. “It is tempting to write off the U.S. and say that the 21st century will belong to someone else, but the US remains in a global role of strength and importance for the 21st century.”
Larry Summers says the U.S. will weather the storm.
Summers directly opposed fellow panelist James Wolfensohn, a former World Bank president and member of the United Nations Eminent Persons Group. Wolfensohn, who sat down with Steve Forbes in January as part of Forbes' Intelligent Investing video series, maintained that the global economy is moving East.
“The power will shift to China and India by 2050 – at that time they will own 50% of global GDP,” Wolfensohn said yesterday, predicting a global economic restructuring.
Wolfensohn spoke about a global swing toward Asia with Steve Forbes in January, describing a lack of U.S. competitiveness:
Forbes: You've said that Western countries, including the United States, lack competitiveness, and that the Asian economy seemed to be doing better in terms of governance, that they're more competitive. First, in terms of lack of competitiveness, what do you see as holding us back, and what should we be doing?
Wolfensohn: This is not a quick fix. I think that we've been relying on our past investments for too long, first, in terms of manufacturing, then in terms of service industry, and then in terms of research. And at each level, it's been passed over essentially to Asia. But there's always been something left for us and we've had a lead in something.
Today that's no longer the case.
Wolfensohn told Forbes that the problem started with education, and that the United States needs to improve its “outrageously bad” public school system.
Yesterday he put it even more bluntly: “Get your kids to learn Chinese”
Summers countered Wolfensohn’s assertions, although he did not deny the trends outright.
“I don’t minimize the current economic problems it is experiencing, but it is still recovering and growing more than most of the industrialized world,” said Summers. “The coming years won’t be years of prosperity, but when people look back they will be astonished with how the U.S. recovered and moved forward from a very serious economic crisis.”
“I would suggest to you that, as before, it is the resilience of the United States, its capacity to reinvent itself that is the United States’ greatest strength.”
