We speak with American journalist and author, Thomas Friedman about his latest book and the global economic crisis.
Airdate: 
Wednesday, October 15, 2008 - 20:30
Channel: 
SBS

George Negus speaks with American journalist, columnist and author, Thomas Friedman about his latest book and the global economic crisis.

In his latest book - Hot, Flat, and Crowded, Friedman talks about how America has lost its way since 9/11, branding it a 'subprime nation'.

"In some ways, the subprime mortgage mess and housing crisis are metaphors for what has come over America in recent years: A certain connection between hard work, achievement, and accountability has been broken", he says in the book.

Meanwhile as world financial markets tumble, Mr Friedman gives his analysis on the global economic downturn and how America will be affected in the long term.

Transcript

With the turmoil on global financial markets escalating, world leaders, most of them unequivocal champions of the so-called free market, met on the weekend to prop up their ailing banks and financial institutions, largely at their taxpayers' expense. At the same time one of America's great soothsayers released his latest book, 'Hot, Flat and Crowded'. But was Pulitzer Prize winner, Thomas Friedman a bit too clever by half with this clever title? He actually bashed out his book before the current credit crisis and wrote that in order to save the planet we urgently needs a total green revolution led by the - wait for it - the US. Hang on a tick did I hear you say, wasn't it the US that caused the current economic chaos crashing its way around the globe? George Negus spoke with the 'New York Times' Thomas Friedman from London.

GEORGE NEGUS: Thomas, I've been an avid leader of your columns for years and I have devoured your books, but you must be wondering if your new book should be called 'Hot, Flat Crowded and Broke'.

THOMAS FRIEDMAN, JOURNALIST AND AUTHOR: I've thought of calling it "Hot Crowded and Busted".

GEORGE NEGUS: Do you feel a little bit gazumped by history, because that chapter 18 you said you might have to write for this book would obviously be about the current financial crisis, but it is ironic that these things can happen as quickly as they have.

THOMAS FRIEDMAN: There is no question this we have gone from the world's solver to the world's problem in record time here and I think, George, the really big change that Australians and Americans have to think about is, you know, we really spent a lot of the last two decades, since the fall of the Berlin Wall, worrying about a world of too much American power. That's what people outside the United States were worried about. Now you will have to worry about a world with too little American power. That might be more problematic for Australia and others than a world of too much American power.

GEORGE NEGUS: There was a quote from probably a gentleman that you know Jonathan Freeland, he actually said that Americans were craving for a leader that they could feel good about, in fact the very phrase he used was a Bill Clinton phrase where he thought that the world would want to be, if you like, awed by an America, not by the example of its power, but by the power of its example. I mean, how is America going the regain its status in the world, its reputation, because this latest crises that we find ourselves in, most people would stamp "made in America" on it.

THOMAS FRIEDMAN: There is no question. First of all, we've got to get our basics back under control. We've got to get back to prudent lending and prudent borrowing and getting ahead in the world and buying the American dream based on really hard work. That's the obvious thing. Beyond that, we need a great mission worthy of America that we are not the United States of fighting terrorism. You know, we are capable of so much more and we need a great project worthy of the innovative prowess and the inspirational prowess of the United States. For me, that project is leading the green revolution, being the country that sets the example in the world by growing rich, respected, entrepreneurial, competitive, energy-secure, nationally secure by becoming the greenest country in the world. We don't just need a bail-out, but we need to green the bail-out.

GEORGE NEGUS: Isn't the problem going to be that people might want to put this justifiably concerned about climate change and global warming on the back-burner on hold until this financial chaos, the economic crisis is sorted out?

THOMAS FRIEDMAN: There is a huge danger in that, George. One of the things that I've been trying to point out is we had a big bubble and then bust in railroads in America in the 19th century, but when it was all said and done and people lost a lot of money on railroads, it left us with an amazing national railroad system on which many people were able to travel more cheaply and shift freight more cheaply. As you know in the 20th century we had a big dot com boom bubble and bust economy. Most people lost money, but in the end we were left with an amazing band super highway on which Google and Microsoft was built. The real tragedy of this moment is that this financial boom bubble and bust has left us with a bunch of empty condos in Florida and a bunch of dead, derivative contracts that no-one understands. That is why it is critical as we bail ourselves out, as we inject money into the economy that we do it in a way that will launch a green revolution. We spend the money on green technologies, and on, you know, more mass transit, things that will leave us with a new infrastructure for a new economy. It is critical.

GEORGE NEGUS: We will come back to your suggestion of GO greenism, I think is what you refer to it as. But the situation at the moment in America that we are all preoccupied by, because it is now a global problem, 22 world leaders meeting on one weekend to see what they can do about it, is a pretty unique state of affairs. Is it America that's lost the plot or just Wall Street?

THOMAS FRIEDMAN: Good question. I think it is a little of both. You know, we got into a financial situation I think, George, where the very people running these companies did not understand the things that they were owning, that they were involved in. You know, people has asked me about the world is flat and what this says about it. I feel like writing a column and saying, "Sorry, it is so much flatter than I thought. Who knew that Iceland was a hedge fund with glaciers? Who knew?" Here I am in UK and it turns out that UK municipalities that are going to go bankrupt because their money was tied up in Icelandic banks that owned American mortgages - gee, I knew it was flat but not that flat.

GEORGE NEGUS: Could you say this in fact is globalisation gone mad?

THOMAS FRIEDMAN: It is. This is globalisation on steroids. You know, the upside of it, George, was that a lot of people in the developing world from India to China to Brazil, saw their income rise enormously during the last 20 years because of this global movement of capital. Also a lot of people got fantastically rich at the high end, but it is clear this was built on a lot of financial instruments that people did not understand and we need to get back to basics and understanding what we own, get back to more real engineering and less financial engineering.

GEORGE NEGUS: As I heard Barack Obama saying in the last few hours, "People learning to live all over again to live within their means."

THOMAS FRIEDMAN: There is no question about it. The long-term implications of this are going to be enormous. I've been telling my girls, "Girls, take notes. You're living through a historic period about which you will tell your own grandchildren", the way my parents did with the great depression. God forbid we should go that far, but this is a historic period.

GEORGE NEGUS: You talk about the green revolution what is necessary and America needing a green president, maybe we could top that up by saying, "Yes, a green president by all means, but one that also knows something about economics and finances."?

THOMAS FRIEDMAN: There is no question. We've paid a huge price for George W. Bush here in the last month. I mean, we've paid a huge price for him in the last ate years, but in particular in the last month, we have paid a huge price for having a president who has behaved like a troll who comes out of the White House every four or five days and tells us it is OK and disappears into the White House. The reason we have paid a price is because we haven't had a president who could sit down calmly and clearly and vividly explain to Americans what is the problem we are in and what is the solution. That's why we have all of this crazy, messy politics with the House of Representatives rejecting the bail-out one day and then coming back five days later. People telling you it is all about Wall Street and it is not about Main Street. We've paid a huge price for a president who could not speak the English language.

GEORGE NEGUS: It seeps to me that combining a lot of your work over the last few years and this current - your latest, what you are saying to me now, it seems what we are looking for is simultaneously, if that is possible, a new green order for the globe and a new economic order, simultaneously? That's a big ask for the poor old human race.

THOMAS FRIEDMAN: It is a big ask, but the two actually entwine. I would argue that in a world that is getting hot, flat and crowded, we have to have a new green order. It is absolutely essential. I think what I call ET energy technology will be the next great global industry. I know that for sure in the world we are heading into. What I don't know is which country will lead that. Will it be Australia, Europe, Japan, India, China, America? I don't know. All I know is that the country that leads that is going to also be THE dominant economic country. You cannot be big without being big in big things and the biggest thing is going the be ET. So there is no way to get out of this economically without also seizing the economic high ground and it will be around ET.

GEORGE NEGUS: Thomas, this is coming also at a strategic moment in the globes history, the upcoming American election in less than a fortnight really, does it matter one iota in this current situation, with the green problem on the one hand and the financial problem on the other, which of the two - Obama or McCain pulls it off because whoever it is, is going to have to lead the world through this whole mess - America and the world - through this whole shambles.

THOMAS FRIEDMAN: It matters enormously, this is certainly the most important election in my lifetime and I think the most important elections in many, many decades in the United States. We need a president who is a calm cool customer, we need a president who is articulate enough to talk to the world and we need a president who is not wedded to crazy ideologies like 'drill baby drill' when our motto in the world must be 'invent baby invent'.

GEORGE NEGUS: Does that mean that you think that Obama is the man, that the wrong person in the White House could spell even bigger trouble for the globe?

THOMAS FRIEDMAN: I'm not allowed to endorse candidates but I'll let your viewers figurer it out.

GEORGE NEGUS: I think they probably have Thom. It has been great talking to you and I'll let you go because you have to go off and write that 18th chapter for 'Hot Flat Crowded and Busted.'

THOMAS FRIEDMAN: Thank you very much George.

GEORGE NEGUS: Thomas Friedman, journalist and thinker and no doubt there will be a lot of what we just heard in that extra Busted chapter Thom has promised to add to his book - not though I tip- until after we see who ends up in the White House in three weeks time, once bitten twice shy would have to be Thom's watch word after being pipped by history on the credit crisis.

Producer/Researcher
JANE WORTHINGTON

Editor
ANGUS FORBES