We're Number Eleven!

It's highly entertaining to see the lengths to which Americans will go to avoid Reality. Psychological defense mechanisms are surely characteristic of our species, but Americans have turned simple Denial into an art form. Newsweek recently ranked all the countries of the world using a bunch of statistical measures. It turns out that we're Number Eleven! Well, OK, maybe not—see below. Newsweek says don't despair—

America may be declining, but don’t despair.

Like the summer heat, fear of America’s impending decline is weighing on Washington these days. Has the United States lost its oomph as a superpower? Even President Obama isn’t immune from the gloom. “Americans won’t settle for No. 2!” Obama shouted at one political rally in early August. How about No. 11? That’s where the U.S.A. ranks in Newsweek’s list of the 100 best countries in the world, not even in the top 10. And as the worst recession since the ’30s festers on, along with the wars in Afghanistan and Iraq, no number of legislative triumphs—financial reform! health care!—seem capable of lifting the nation out of its doldrums.

Number 11? That didn't sound too good, but then I started playing with Newsweek's interactive tool to examine the nations ahead of us and behind us. That's when the fun really began.

There are five categories:

Eduation
Health
Quality of Life
Economic Dynamism
Political Environment

Ranked #1 to #10 were Finland, Switzerland, Sweden, Australia, Luxembourg, Norway, Canada, Netherlands, Japan and Denmark. No real surprises there, but if Japan is so bad off economically, as everyone likes to tell us, why are they ranked 2 spots ahead of the United States?

Directly behind us was Germany. Germany? You can't be serious. Consider the Germans—

For here’s a strange fact: since 2003, it’s not China but Germany, that colossus of European socialism, that has either led the world in export sales or at least been tied for first. Even as we in the United States fall more deeply into the clutches of our foreign creditors—China foremost among them—Germany has somehow managed to create a high-wage, unionized economy without shipping all its jobs abroad or creating a massive trade deficit, or any trade deficit at all. Sure, China just pulled slightly ahead of Germany, but that’s mostly because the euro has soared, making German goods even more expensive, and world trade has slumped. Meanwhile, the dollar is dropping, and we still can’t compete with either nation. And even as the Germans outsell the United States, they manage to take six weeks of vacation every year. They’re beating us with one hand tied behind their back.

This is common knowledge among those in the know—the Germans are beating us with one hand tied behind their back. And their infrastructure is up to date. And their public transportation can't be beat. And no one goes without excellent health care, etc. What's going on here? Here are the Newsweek numbers comparing the United States (#11) and Germany (#12). I'll throw in France (#16) for good measure.

Country	Education	Health	Quality of Life	Economic Dynamism	Political Environment
United States	89.44	86.51	88.58	77.85	86.18
Germany	91.13	92.76	88.80	*61.89*	89.50
France	91.35	92.76	87.76	61.54	82.90

Look at that — Newsweek cooked the books! Oh, they didn't cook the numbers by manipulating them. What they did was more subtle. They defined their ranking methodology so that "Economic Dynamism" made us look much better than we are. By every reasonable measure—Eduation, Health, etc.—Germany is ranked higher than the United States. But there's that huge, insurmountable gap in Economic Dynamism which can't be overcome in the other categories. And didn't we just read that economically, Germany is kicking our ass? We sure did, and it's true.

You can look at Newsweek's methodology page if you like. And as they themselves say, "statistics can only measure so much." But let's take a subjective look at Economic Dynamism—what does this really mean? America is ranked second in the world in this category, just behind Singapore. Since it is one of only 5 major categories, it must be just as important as Health or Quality of Life.

I believe Newsweek must have something like this definition of "dynamism" in mind—

Marked by continuous and productive activity or change (in the economy)

Well, America had two enormous bubbles, one in the stock market, and a second, much bigger bubble in housing over the last 15 years. That's certainly continuous and productive change—right up to the point when it's not. Or perhaps we should ask: productive of what?

When that second bubble collapsed, real GDP was much higher than it had ever been. Good job! But then about $9,000,000,000,000 (trillion) in phony wealth got destroyed. And now the Housing Market is on life-support, and will be for years to come. And real GDP has not gotten back to it's 2007 level. And BLS U-5 unemployment is about 11%. And underemployment is somewhere north of 18%. And 1 in 7 Americans live in poverty. And 41 million are receiving food stamps. Change is certainly continuous in America.

You can say what you want about all this, but you can hardly deny our Economic Dynamism. You won't find this kind of Economic Dynamism in Germany. Those Germans are way too boring for America's kind of continuous change.

If we hold the other categories fixed, and throw out the Economic Dynamism, where does America rank? Are we 15^th? 19^th? 23^rd? 31^st? Who knows? But who cares — here in Cowboy America, anything can happen!

With Asian Subtitles! Soon, we'll be living high & wide...