Summary of Three Billion New Capitalists

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If you don't have enough to keep you awake worrying at night, this is the book for you. In forceful, lucid and convincing fashion, author Clyde Prestowitz, a Commerce Department trade official in the Reagan administration, outlines a nightmare scenario. The era of U.S. economic supremacy is long past. The future belongs to the East, notably India and China. Americans have lost their global manufacturing leadership to Japan and China. Until recently, it seemed that America would shift to service industries - but, in fact, it now seems as if India will dominate global services. Because of shortsighted political and business leaders, America has failed to perceive the inevitable. Many Americans still cannot or will not face the truth. A global economic system established on the foundation of U.S. consumption may not survive the shift of wealth and power to the East. The consequences of U.S. economic collapse will be profound and painful for the whole world - but unless something drastic is done (and it's not clear what), this collapse is all but inevitable. The one ray of hope is that this author has been nightmarishly, terrifyingly wrong before. He used to think Japan was going to seize the U.S. mantle, and he published a book about that threat. Japan is no longer much of a threat. Yet, if you seek a very persuasive, very pessimistic global perspective to help you stay informed, recommends this economic crystal ball. Just don't expect to get any sleep.

About the Author

Clyde Prestowitz was counselor to the Secretary of Commerce in the Reagan Administration. He is now President of the Economic Strategy Institute in Washington, D.C., and the author of Trading Places and Rogue Nations.



What Me Worry? Well, Yes!

Almost daily, headlines offer yet another bit of data to support the thesis that financial and technological leadership has packed up and moved east. China manufactures for the world. India provides the world's services. No wonder. Billions of people formerly constrained by communist or socialist economic systems have thrown those ideologies onto the dustbin of history and converted to capitalism. Now, billions of hardworking, often highly skilled, people, are chasing the jobs and industries that once made America great.

Moreover, Americans have been happy to let this happen. International post-WWII economic arrangements established U.S. consumption as the engine of global economic recovery. The closing of the gold window by President Nixon in 1971 threw off the last remaining discipline on U.S. consumption - the dollar's convertibility to gold. Since 1971, Americans have been able to buy what the rest of the world makes and offer only paper in exchange - an IOU in the form of dollars. Americans have been living on borrowed wealth. But world lending patience has a limit, and the U.S. has just about reached it.

U.S. trade deficits are...

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