Ah, but you forget, Mr. Friedman, that we’ve got this too-big-to-fail banking system, a monster of a military-industrial complex, and a federal government that’s held hostage to ideologues. Against those rigidities our “flexible federal system” is of little avail.
In Europe, hyperconnectedness both exposed just how uncompetitive some of their economies were, but also how interdependent they had become. It was a deadly combination. When countries with such different cultures become this interconnected and interdependent — when they share the same currency but not the same work ethics, retirement ages or budget discipline — you end up with German savers seething at Greek workers, and vice versa.
And us? America’s flexible federal system makes it, theoretically, well-suited to thrive in a hyperconnected world, but only if we get our macroeconomic house in order and our education up to par (or better). We should be the world’s island of stability today. But we’re not. As Mohamed el-Erian, the chief executive of the bond giant Pimco, puts it, “We’re just the cleanest dirty shirt around.”