The Economy

Current attitudes aren't too kind to the old American way of doing business. In our globalized economy, the most enthusiastically touted approaches are those adopted by centralized, state-dominated economies such as China, Brazil and Russia as well as--somewhat less oppressively--those of the major E.U. states.

Yet the U.S. may well be constructing the best sustainable business model for the 21st Century. It is an approach built on the country's greatest enduring strength--an innovative business culture driven increasingly by a diverse pool of immigrants.

China's ascension to the world's second-largest economy, surpassing Japan, has led to predictions that it will inevitably snatch the No. 1 spot from the United States. Nomura Securities envisions China surpassing the U.S.' total GDP in little more than a decade. And economist Robert Fogel predicts that by 2050 China's economy will account for 40% of the world's GDP, with the U.S.' share shrinking to a measly 14%.

Americans indeed should worry about the prospect of slipping status, but the idée fixe about China's inevitable hegemony--like Japan's two decades ago--could prove greatly exaggerated. Countries generally do not experience hyper-growth--the starting point for many predictions--for long. Eventually costs rise, internal pressures grow and natural limitations brake and can even throw the economy into reverse.

California has long been a destination for those seeking a better place to live. For most of its history, the state enacted sensible policies that created one of the wealthiest and most innovative economies in human history. California realized the American dream but better, fostering a huge middle class that, for the most part, owned their homes, sent their kids to public schools, and found meaningful work connected to the state’s amazingly diverse, innovative economy.

The most serious collateral damage from the BP spill disaster could very likely be in the far north, along the Alaskan coast. The problem is not a current spill but the Obama administration's ban on offshore drilling and what many fear may be a broader attempt to close the state from further resource-related development.

Such an approach could harm both the local and national economies for decades to come.

Nearly a century and half since the United States last divided, a new "irrepressible conflict" is brewing between the states. It revolves around the expansion of federal power at the expense of state and local prerogatives. It also reflects a growing economic divide, arguably more important than the much discussed ideological one, between very different regional economies.

Financial reform might irk Wall Street, but the president’s real problem is with small businesses—the engine of any serious recovery. Joel Kotkin on what he could have done differently.

Class, the Industrial Revolution’s great political dividing line, is enjoying Information Age resurgence. It now threatens the political future of presidents, prime ministers and even Politburo chiefs.

As in the Industrial Age, new technology is displacing whole groups of people — blue- and white-collar workers — as it boosts productivity and creates opportunities for others. Inequality is on the rise — from the developing world to historically egalitarian Scandinavia and Britain.

On a drizzly, warm June night, the bars, galleries, and restaurants along Broadway are packed with young revelers. Traffic moves slowly, as drivers look for parking. The bar at the Donaldson, a boutique hotel, is so packed with stylish patrons that I can’t get a drink. My friend, a local, and I head over to Monte’s, a trendy Italian place down the street. We watch a group of attractive 30-something blondes share a table and gossip. They look like the cast of the latest Housewives series.

Estimates of the United states population at the middle of the 21st century vary, from the U.N.’s 404 million to the U.S. Census Bureau’s 422 to 458 million. To develop a snapshot of the nation at 2050, particularly its astonishing diversity and youthfulness, I use the nice round number of 400 million people, or roughly 100 million more than we have today.

As world leaders gather in Canada this weekend, the nations with the most influence won't be the high-tech mavens. Joel Kotkin on why traditional industries still matter in the post-information age.

Are we entering the post-information age?

For much of the last quarter century, conventional wisdom from some of the best minds of our times, like Daniel Bell, Alvin Toffler and Taichi Sakaiya—in both East and West—predicted that power would shift to those countries that dominate the so-called information age. At the time, this was the right call, but it may increasingly be, if you will, old news. Although there’s no question that iPhones and 3-D movies are nifty—and hedge funds generators of massive wealth for investors and operators—we now may actually be entering what might be called the post-information age.