The global economy has three great hubs: New York, Tokyo, and London. Two of the three have already suffered terrorist attacks this century, and London is under fire again. Don't forget that the 9/11 attacks were, to a great extent, the start of a war on globalization, as symbolized by the World Trade Center. "The towers are economic power," Osama bin Laden said in an October 2001 interview. It's globalization—the worldwide spread of people, capital, products, brands, and ideas—that's the real threat to the terrorists. Geopolitical strategist and consultant Tom Barnett, a former professor at the U.S. Naval War College, says the jihadist menace is, in reality...
"...'global' resistance that's really all about the Gap, where globalization is coming in...and reformatting traditional societies that are unprepared for its new rule sets. Radical extremists (typically young men) rise up in resistance to this Borg-like assimilation, believing it's evil and driven by infidels. They advocate a civilizational apartheid, and their dream expression is the resurrection of the ancient caliphate stretching across the whole of the predominately Islamic societies of North Africa to southeast Asia...Faced with a globalizing integration process, it 'goes global' itself. The answer to this threat is to make globalization global, meaning it's essentially a race."
So, who's winning the race, us or them? One way to answer that is to examine how the global economy is doing in the post-9/11 era? The answer: It's booming. World economic growth has averaged right around 5 percent since 2002, and it looks to be right on track again this year. In a way, this is the strongest global economy in history.
As for America, our economy has been expanding since late 2001, and unemployment is low. But there is some cause for concern. Perceived income inequality might be causing a globalization backlash in America and the European Union, slowing efforts to expand trade and connectivity.
Economist Ed Yardeni identifies several worrisome signs: 1) the failure to revive the Doha Round of trade liberalization; 2) the expiration of the White House's "fast track" trade authority; 3) newly elected French President Nicolas Sarkozy's success in eliminating a commitment to "undistorted competition" from a new draft of the EU constitution; 4) a warning from the Organization for Economic Cooperation and Development about increasing political resistance to international trade and investment; 5) efforts in Congress to push China to float the yuan.
But Wall Street doesn't seem to be worrying much, with the Dow up 1,000 points since mid-April. So, for now, let's follow the Big Money Crowd, be positive, and enjoy Independence Day. And then it's back to the race.