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ROBERT SIEGEL, host: Now, a talk with Thomas Friedman, the New York Times columnist, about his new book. But first, this historical analogy made on this program earlier this year by Paul Otellini, the CEO of Intel. Our country's situation today, Otellini said, is like Britain's situation at the turn of the last century.

PAUL OTELLINI: The U.K., a hundred years ago, was where America was. I imagine sitting in Britain 110 years ago looking at the rising giant of the United States - the buildings going up and the new factories and the schools and the universities, and they must have been saying, oh, my God. And in fact, the U.S. eclipsed the U.K. and most of Europe.

Well, we're sitting here today looking over the next ocean, the Pacific this time, and the infrastructure being built out in Asia, not just China but across Asia. And we should be appropriately saying, oh, my God.

SIEGEL: Oh my God, could have well been the title of the new book that Thomas Friedman and Michael Mandelbaum have written. It's called "That Used To Be Us: How America Fell Behind In The World It Invented And How We Can Come Back." Tom Friedman, welcome to the program.

TOM FRIEDMAN: Great to be with you, Robert.

SIEGEL: What you're describing here is a country that used to be industrially advanced, exceptionally inventive, unusually educated, politically pragmatic, relatively egalitarian. Today, we look around and say, that used to be us, other countries are more like that now.

FRIEDMAN: Well, there's no question we've lost our way, Robert. And what Michael and I argue in the book is that it's really the product of three big things. It's not the 2008 subprime crisis. This problem started at the end of the Cold War. We made the biggest mistake a country or a species can make: we misread our environment.

We thought the Cold War was a victory and we could put our feet up. In fact, we had just unleashed a world of two billion people just like us - people with our same aspirations, same capabilities. And just when we needed to be lacing up our shoes and running faster, we put our feet up. We compounded it then, I would add, with a decade, unfortunately tragically after 9/11, where we ended up chasing the losers from globalization for 10 years, al-Qaida, rather than the winners.

SIEGEL: We were preoccupied, you would say, with the wrong rivals...

FRIEDMAN: Yes.

SIEGEL: ...during this past decade.

Some people might argue this point or that about our decline. But let's stipulate that your description of the national funk, or the decline that we're in, is accurate. Why? What was going through our minds over the past 20 years that vetoed an older impulse to say, hey, we have to compete economically, we have to save and invest, we have to pay for what we do?

FRIEDMAN: Well, as I say, there was a third factor and that was a generational change. We shifted from a Greatest Generation that really operated on what we call in the book sustainable values - saving and investing - and we handed power over to the Baby Boomer generation who really lived by situational values - borrow and consume. And I think that shift has been a key factor.

SIEGEL: But to some extent, we have seen the enemy and he is - he's our generation.

FRIEDMAN: Oh, it's definitely - the baby boomers, I believe, have a lot to answer for. They have not followed in the path of their parents in terms of making the hard decisions, making the long-term investments - doubly important at this time of huge technological change. Let me just say a few words about that because it's very important.

You know, the world after the Cold War didn't just get connected. It got hyper-connected. And when it did, we were exposed to competition from so many more people, so many more machines, and so many more robots. You know, Robert, I wrote a book in - started in 2004 called "The World Is Flat." And as I started working on this book, I went back and I reread "The World Is Flat," and actually looked in the index - first edition, under F. and I realized Facebook wasn't in it.

(SOUNDBITE OF LAUGHTER)

FRIEDMAN: When I wrote "The World Is Flat," I said the world is flat. Yeah, we're all connected. Facebook didn't exist; Twitter was a sound; the cloud was in the sky; 4G was a parking place; LinkedIn was a prison; applications were what you sent to college and Skype for most people was a typo. All of that changed in just the last six years.

SIEGEL: But here's a problem with the very flatness that you've written about. Your book, the problem it's addressing is a national concern. You're writing about this country. And I wonder when you talk to CEOs of large companies whose markets, shareholders, increasingly their labor force, are global - they're not confined to this country, whether they're on board with the national project. Or does the very flat world that you've written about mean that the production of wealth by American-based companies just doesn't benefit as many Americans as it used to and it may never.

FRIEDMAN: I think that's exactly right. See, American multinationals today, those big companies we think about, Robert, they actually aren't in America. They hover over America. And we are missing actually the voices of those CEOs in our discussions - in our national discussions on education and infrastructure - because if they can't get the workers, the infrastructure, the opportunities they need here, they can just go somewhere else. And that's a huge problem.

But I think it gets to what needs to be our vision going forward. There's kind of a hankering today, when is Ford going to put in that 50,000-worker factory in my city again? When is Intel going to come, Paul Otellini? Folks, it's not going to happen because those factories now are all incredibly roboticized, automated, and they are capital-intensive, not labor-intensive. We're not going to have a 50,000-person factory in your town.

What we need are 50,000 people, a thousand of whom are starting jobs for 10 people, 50 of whom for 100, 100 of whom for 30 - that everybody needs to be starting something.

SIEGEL: But many of the remedies that you write about here are good in theory. But, say, having more and better teachers or a national academy of teachers is a proposal you're making in a season when in fact we're laying off teachers. A balanced approach to solving our fiscal problems is something you write about, and we know what the fact, the stalemate is in Washington. How do you get from where we are right now to solutions that might indeed address our national problems? What do you do?

FRIEDMAN: Well, we understand the political system is gridlocked. You know, I would argue one of our political parties, the Republican Party today in particular - and we are independents; is not a political book - but they've really gone off the rails in a certain way. And that's why, you know, if you look at what's going on today, Robert, in America, we're having an economic crisis and the politicians are having an election and it's like they don't even overlap.

And what we argue is that's because the incentives of politics today - money, gerrymandered districts - are so misaligned with the needs of the country that they become like a closed circle, operating on their own. And something has got to break through that. And what we argue for is an independent third party that actually can show that there is a huge middle in this country that demands a different politics.

SIEGEL: You go out of your way to end on an upbeat note in the book, and say that you - do you really feel optimistic? I mean, do you really look around at Washington and the economy and say, yeah, we're going to come out of this okay?

FRIEDMAN: Drugs, Robert.

(SOUNDBITE OF LAUGHTER)

FRIEDMAN: A lot of drugs.

(SOUNDBITE OF LAUGHTER)

SIEGEL: You're self-medicating.

FRIEDMAN: No, it's - look, I am truly an optimist. And the reason - we don't just end on an optimistic note. We end on a long discussion about what makes us optimists. It's because this country is full of people today who just didn't get the word. They just didn't get the word that we're down and out. They just didn't get the word that Washington is paralyzed. And they go out and start stuff and invent stuff and fix stuff and make stuff, no matter what's going on in Washington.

SIEGEL: Tom Friedman, thanks for talking with us.

FRIEDMAN: Pleasure.

SIEGEL: Thomas Friedman and Michael Mandelbaum are the authors of "That Used To Be Us: How America Fell Behind In The World It Invented And How We Can Come Back."

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