Reinventing America — from the bottom up

By Peter Sims
August 30, 2011

By Peter Sims
The opinions expressed are his own.

With Europe on the precipice, economically and politically, and U.S. institutions experiencing a significant crisis of moral leadership in the wake of the debt ceiling debacle, any student of history can predict that the world is approaching an inflection point.

Into this period of enormous uncertainty (and leadership vacuum) steps Thomas L. Friedman, the three-time Pulitzer Prize winning New York Times columnist, with his latest book That Used to Be US: How America Fell Behind the World it Invented and How We Can Come Back.

Coauthored with Friedman’s close personal friend, Michael Mandelbaum, who is a Professor of American Foreign Policy at the Johns Hopkins School of Advanced International Studies, the authors set out to diagnose and frame a national dialogue and a set of possible solutions about a way forward.

Although the book has two authors, it reads much like Friedman’s other best-selling books, most recently The World is Flat, structured around a series of key arguments, themes, and insights and, of course, stories and memorable phrases.

The authors begin to lay out a major national problem by saying: “People have sort of gotten used to it.” That is, they argue, Americans have developed a certain resignation that America’s best days are behind it, while China’s best days are ahead. We hear a range of voices illustrating the national malaise, ranging from teachers to former Pennsylvania Governor Ed Rendell, who declared, “We’ve become a nation of wusses,” after the NFL postponed a Philadelphia Eagles football game due to snow. “The Chinese are kicking our butt at everything,” Rendell went onto say, “If this was in China, do you think the Chinese would have called off the game?”

Herein lies a crux of the authors’ literary foil, consistent with Friedman’s NYT columns over the past several years: that the Chinese are somehow doing many things better than Americans these days (although the authors are careful to note much remains to be unfolded as China develops). Their main goal in highlighting the rise of China, which they state explicitly, is to create a sense of urgency for the reform movement that is so badly needed.

What’s more, they say, in the post-Cold War era, America is experiencing an identity crisis of sorts without a visible competitor like the Soviet Union or a bold “man to the moon” aspiration to draw us together. They quote General Electric CEO Jeff Immelt as saying: “What we lack in the U.S. today is confidence that is generated by solving one big, hard problem — together.”

The authors insert China as the foil to create a sense of national urgency and applaud China’s “willingness to search the world for the best practices, experiment with them, and then scale those that work is truly impressive.” But, it’s a straw man that feels underdeveloped, especially after we heard the same argument about Japan in the 1980s, and since China will have more than its share of problems as every developing nation always does. And, a large portion of the book, especially the later two-thirds, includes recycled material from Friedman’s previous Times columns.

But that said, Friedman and Mandelbaum do a masterful job of framing some of America’s greatest challenges, as well as the potential solutions. They’re not afraid, for example, to call out what they believe is a “corrupt” two-party duopoly. That term itself should engender widespread national discussion and Friedman has become one of the leading national observers and commentators calling for an Independent presidential candidate to shake up the system. (With Starbucks CEO Howard Schultz’s recent missive calling for an end to political campaign contributions from fellow corporate leaders also attracting enormous grassroots appeal, the authors’ wish may not be far off.)

Another theme the authors skillfully hammer upon is the problems associated with an era top-down policy-making, such as No Child Left Behind. In an era of globalization and the IT revolution, change increasingly rewards bottom-up innovation and the capacity for adaptation. One particularly good example for why a different way of thinking and approaching problems is needed comes from Friedman’s discussions with Byron Auguste, a managing director with McKinsey & Company.

Auguste and McKinsey researchers have found that American companies are not rehiring people coming out of the past two recessions like they had during previous recoveries. So, companies will routinely lay off 30 to 40 percent of their workforce during recessions, and then rehire workers once demand returned again. Yet in the recession of 1998, companies were able to make up for roughly 98 percent of their lost revenue with automation and outsourcing, rather than hiring workers back. As Auguste puts it, “When demand comes back, firms won’t hire back as many workers [as in the past], because they have now fundamentally restructured their operations to do their business with fewer people.”

This is a crucial insight, emblematic of many points the authors make. The world has fundamentally changed, and we can no longer look to the past to predict what will get us out of the current crises. We must invent new assumptions and solutions at a time when American institutions are in dire need of renewal and reinvention.

This book should elicit a significant national response — an outcry even — from the American people who understand that moments like these in history demand action and leadership.

Ultimately, Friedman and Mandelbaum declare their core argument and point of view:

After all, while the term “American exceptionalism” reeks of the very arrogance and paternalism that our founders rebelled against, America’s culture of entrepreneurship is unique and should give us all great optimism about the future. Young Americans may face enormous difficulties getting jobs out of college, while saddled with enormous debt burdens, yet many of them are inventing their own jobs, building beneficial personal and professional ecosystems on Facebook and Twitter, and are as socially minded a generation as the country has ever seen.

If you need proof, just go to Detroit. The city that was American industrial death is undergoing a Renaissance, propelled by precisely the type of entrepreneurial leadership the country is desperate for. What’s more, the young business people, designers, artists, and social entrepreneurs are having fun, which is in stark contrast to many of those who’ve endured this long, hot Washington DC summer. And, oh yeah, the musician Eminem is singing the soundtrack to that reinvention. Out of the ashes, Detroit is rising as the most important example of American renewal in decades.

That resilience, energy, and, yes, entrepreneurial leadership stands the chance to do what the established generation of elected and positional “leaders” has failed to do — to reinvent and reignite the twin American ideals of self-renewal and service to a cause larger than oneself. And that is precisely what Friedman and Mandelbaum hope to achieve.

Buckle up, America. This revolution will be improvised. And, it’s all coming to the forefront of our national consciousness soon, thanks at least in part to That Used to Be Us, a very important and timely book.

Peter Sims is the author of Little Bets: How Breakthrough Ideas Emerge from Small Discoveries and is a Co-Founder and Director of Fuse Corps, an innovative social venture that will enable America’s most entrepreneurial young leaders to work on year-long grassroots projects to tackle some of society’s most pressing problems.

This piece also appeared on


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I appreciate the recent string of Reuters articles about optimistic big-picture views of America. I can only hope that some of them end up becoming part of a new reality.

I think the key takeaway of this article is that American government is top-down. It’s not really a democracy. That’s partially due to the machinations of Washington, including long-term power consolidation and lobbying, and partially due to the fact that most people simply focus on making money and assume that things will turn out OK.

Imagine if Americans actually voted directly on energy policy, abortion, immigration, regional transit, the debt ceiling, corporate taxation, etc. Imagine if Americans – not the Commander in Chief or the prevalent political party – decided whether we should go to war, or even intervene in smaller conflicts. That would be real democracy at work.

I don’t think I’ll see such a scenario in my lifetime – nor am I completely sure that it would be a good idea. What’s better: tyranny of a wealthy minority (our “elected” officials), where vested interests continuously manipulate things to serve their own ends, or the tyranny of an ignorant populace (to give you one example, recent data indicates that only 1/3 of Republicans in Iowa accept the validity of evolution, with roughly 1/5 accepting scientific consensus about anthropogenic climate change). Humans are imperfect, and so are the decisions we make, but I do wish and think that there were more opportunities for Americans to directly influence the outcome of the political process. You can “vote with your wallet” or write a letter to your Congressional rep, both of which are very limited.

Anyway, just something to think about when discussing top-down versus bottom-up governance.

Posted by Nullcorp | Report as abusive

[...] Revolution Tags: Revolution [...]

America made a choice that it will have to reverse.

It should have listened to the late Quality Assurance eminence grise W Edwards Deming

If you start any project with a cost focus ( that includes a country who off shores its manufacturing and basic core ) over time costs go up and Quality goes down ( unemployment , debt etc )

If you do the reverse and target Quality, over time Quality ( of life ) goes up and costs go down

We are simply reaping what we sowed and need to plant a new (metaphorical ) crop for our next generation as we have done continually in our countries history

Posted by Ideapete | Report as abusive

The problem with our economy is not anything that the American people are doing wrong. The problem is that our economic policies are guided by economists. Economists don’t have a clue as to what’s happening to our economy because they steadfastly refuse to consider the effects of the parameter that most dominates our economy today – population growth. They don’t understand the inverse relationship between population density and per capita consumption and the role played by population density disparities in driving global trade imbalances. They continue to lean on population growth as a crutch to prop up macroeconomic growth, which only makes matters worse.

They make proclamations about the cause of our massive trade deficit without ever bothering to verify their claims. They blame it on currency valuations without ever explaining why, in spite of a 300% rise in the value of the yen over the past three decades, our trade deficit with Japan exploded instead of shrinking, or why, in spite of a big rise in the value of the yuan in past few years, our trade deficit with China has done the same thing. Or they blame our trade deficit on low wages without explaining why our biggest trade deficits, in per capita terms, are with wealthy nations like Japan, Germany and a host of others.

And they never explain why America, the most productive nation on earth, seems unable to “compete” with low productivity nations like China. They can’t explain it because they don’t understand what happens when a low population density/high per capita consumption nation like America attempts to combine its economy (through “free” trade) with a high population density/low per capita consumption nation like China (or Japan, or Germany or …). The work of manufacturing is spread evenly across the combined labor force while the disparity in consumption remains. The result is an automatic trade deficit and loss of jobs for America. It’s impossible to “compete” our way out of such a situation.

We don’t need to reinvent ourselves. We need to recognize that we were bamboozled by well-intentioned but badly mistaken “economists” way back in 1947 when they convinced us to sign the Global Agreement on Tariffs and Trade. Prior to that date, the smart use of tariffs built us into the world’s pre-eminent industrial power. But, soon after, our trade surplus began to erode. Since 1975, the last year of a trade surplus, our cumulative trade deficit is approaching $11 trillion.

Our economy will never, ever improve until we take back the right to manage trade in our own best interest, the right that we ceded to the World Trade Organization back in 1947. (By the way, the stated mission of the WTO is not to promote free trade, as many believe, but to enforce protectionist policies in favor of undeveloped and developing countries, nearly two thirds of its member states, to the detriment of America. Don’t believe me? Check their web site.)

Pete Murphy
Author, “Five Short Blasts”

Posted by Pete_Murphy | Report as abusive

What I see is that we have to orchestrate a completely new set of priorities in this country. If we are going to be productive members of a worldly society we are going to have to stop starting wars on other peoples property and overhaul our nation’s infrastucture and get people decent affordable health care. The whole world is giving us the Judge Judy treatment. Don’t pee on my leg and tell me it’s raining.

Posted by laguardia23 | Report as abusive

You seem to be painting a rosy picture and divorcing yourself from reality.
US Corporations and the political establishment have and are perusing the dollar or euro in the sky with complete disregard to cost.
The policy of doing it cheap regardless cost is only just starting to be felt. We contracted our production out overseas and now we no longer have the labor or production facilities to have a rapid recovery.
We no longer produce goods that are as good as or better than the rest of the worlds producers, we no longer have a production based work force, housing which is a secondary based industry is now considered a primary base industry.
We do not have mass transit systems in all major cities, high rise accommodation and high density urban areas are few and far between.
Minor earth quakes on the east coast are reported as disasters followed by a storm which would be considered minor in SE Asia causes damage out of proportion. i.e., our infrastructure cannot handle it.
Hence, all is not well in the US in the short or longterm.

Posted by The1eyedman | Report as abusive

[...] Reinventing America — from the bottom up [...]

[...] few minutes, including about Thomas Friedman’s excellent new book, That Used to Be Us, which I reviewed for last week (and that John was excited to read so I gave him my copy, underlined, dog eared and all, [...]

[...] According to Peter Sims, entrepreneur and former venture capitalist, he criticizes the ability for these jobs to return in a time of growth and states that the loss of these jobs “is a crucial insight, emblematic of many points the authors make. The world has fundamentally changed, and we can no longer look to the past to predict what will get us out of the current crises. We must invent new assumptions and solutions at a time when American institutions are in dire need of renewal and reinvention.” 11/08/30/reinventing-america-from-the-bo ttom-up/ [...]

[…] Link here to the article […]