The Rise of American Incompetence

[Hissyspit]

http://www.slate.com/id/2186547/?from=rss

The Rise of American Incompetence
We used to be the world's most skillful entrepreneurs and managers. Now we're laughingstocks. What happened?

By Daniel Gross
Posted Saturday, March 15, 2008, at 7:12 AM ET

The dollar plunged to new lows against foreign currencies this week. There are plenty of reasons for its plunge, but at the most basic level, the dollar's weakness reflects the world's collective, two-thumbs-down verdict about the ability of the United States—businesses, individuals, the government, the Federal Reserve—to manage the global financial system and the world's largest economy. Countries that outsourced their monetary policy by pegging domestic currencies to the dollar are having second thoughts. Kuwait last year detached the dinar from the dollar, and Qatar government officials last week said they were considering doing the same with their currency. International financiers are unnerved by the toxic combination of "misplaced assumptions about housing, a lack of necessary regulation and irresponsible use of debt with sophisticated financial instruments," said Ashraf Laidi, currency strategist at CMC Markets.

Dissing American financial management is an affront to national pride tantamount to standing in Rome and asking, loudly, if Italians are able to make pasta. The United States invented the concept and practice of running large, complex systems. Along with baseball and deep-frying, management is one of our great national pastimes. The world's first MBAs were awarded by pioneering yuppie factories such as the Wharton School at the University of Pennsylvania. (Wharton's founding in 1881 was quickly followed by the world's first time-share summer houses in the Hamptons.) Henry Ford's revolutionary assembly line was the gold standard in global manufacturing for decades. Contemporary American institutions stand for excellence in managing everything from supply chains (Wal-Mart) to delivery services (Federal Express and UPS).

Americans' ability to manage complex systems has been the ultimate competitive advantage. It has allowed the United States to enjoy high growth and low inflation—a record we haven't hesitated to lord over our foreign friends. The shelves in the business section of a bookstore in a mall in Johannesburg, South Africa, are stocked with the same volumes you'll find in a Barnes & Noble in Pittsburgh, Pa.: memoirs by cornfed paragons of capitalism like Jack Welch, wealth-building advice from American money managers, large tomes on how Andrew Carnegie and John D. Rockefeller built global businesses from scratch.

But now, thanks to widespread incompetence, American management is on its way to becoming an international laughingstock. Faith in American financial sobriety has been widely undermined by the subprime mess. The very mention of the strong-dollar policy now elicits raucous bouts of knee-slapping in even the most sober Swiss banks. (How do you say schadenfreude in German?) Earlier this month, as oil hovered near $100 a barrel, President Bush complained to OPEC about high oil prices. OPEC President Chakib Khelil responded acidly that crude's remarkable run had nothing to do with the reluctance of Persian Gulf nations to pump oil, and everything to do with the "mismanagement of the U.S. economy." Since Bush's plea, oil has gushed to $110 per barrel. (How do you say schadenfreude in Arabic?)

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[IowaGirl]

1. Do you think this has anything to do with American

companies ditching their older, more experienced personnel because of higher health care costs for those employees?

[Xenotime]

2. Companies sure do like to kick their more seasoned people to the curb

[tanyev]

3. The RW created the meme that all of this country's troubles were because of the intellectual elite.

None of them could have anticipated that the country would fall for it hook, line, and sinker. It worked so well that a large chunk of the country voted to put the clown prince of anti-intellectualism in the White House. Twice. Now they, and all of us, are feeling the consequences.

[xchrom]

4. one word: reaganomics. nt