Tom Friedman, the New York Times columnist, wrote a book a few years ago titled The World is Flat, where his thesis was that national and geographical separations had gone away. A factory in Thailand is the same as a factory in Tupelo and a call center in India can do the same things as one in Indianapolis.
The events of 2011 have shown us that he misunderstood the hills and depressions still separating the inhabitants of our planet.
The earthquake and tsunami in Japan is still affecting Toyota and Honda. They are under social and political pressure to keep production in Japan even if it is uneconomic. The floods in Thailand are screwing up their infrastructure even more.
Japan is also slogging through the impediment of a 77 yen to the dollar exchange rate that damages its ability to export goods.
In Europe, the grand experiment of the Euro as common currency for countries as different as Greece and Germany appears to be failing.
Events like the Japanese earthquake and the financial earthquake rumbling through Europe should not be underestimated. These events make North America more interesting to invest in for multinationals.
The horizontal drilling boom for oil and gas, which will probably make United States energy independent in a decade, is a huge serendipitous event that coincides with the realization that long supply lines do matter, and they can fail.
The media tells us that people in America are depressed and pessimistic. Probably true. But the world that I see favors the U.S. right now if we find the right leadership and pull together for a decade.
The drop of 25,000 people per month on Government payrolls shows that the country is starting to self correct. The steady reduction in personal debt is another hopeful sign of correction. Lower real estate prices are also on the whole a positive rebalancing of asset values. Used re-priced homes are finally selling and prices are stable to up in half of the major markets in the country. Retail sales are solidly up at Home Depot, which would not be the case in a deteriorating home market.
I think we spend so much time staring at our own warts that we miss the bigger picture. The world is not flat. We may not be king of the hill, but if not us, who is?
Question: Which country do you think is “King of the Hill?”