"A modest man," Winston Churchill supposedly quipped about Clement Attlee, his successor as prime minister, "but then he has so much to be modest about." We should say the same about economists, particularly their ability to forecast anything in a useful and timely manner.
Those predicting an imminent American economic decline have usually been no exception. This time, though, they may be on to something.
Prevailing arguments about when the era of U.S. dominance would end, and which country would supplant it, have been wildly and consistently wrong for half a century. In the 1950s, Soviet leader Nikita Khrushchev was taken seriously when he told Western ambassadors "We will bury you." Today, his country no longer exists. In the 1980s, Japan was supposedly going to be No. 1; now the question is whether the precipitous decline in its working-age population will generate a fiscal crisis.
The Germans - or Europeans more broadly - were thought to be on the brink of elbowing aside the United States several times, including in the run-up to the global financial crisis in 2008, when the euro seemed to threaten the dollar's role as the pre- eminent reserve currency. Remember when Brazilian model Gisele Bundchen was quoted as saying she preferred to be paid in euros? Now the euro-area economy looks very sick indeed, and Bundchen is apparently long American icons (she married football player Tom Brady).
Becoming the world's top economic dog isn't easy. That's because any contender - China or anyone else - needs to answer three tough questions.
First, do they have secure property rights for individuals? Who would trust their rainy-day funds or their most innovative ideas in a country where, when the going gets tough, the state gets your stuff? China has a big current-account surplus and lots of foreign-exchange reserves. They also have a 2,000-year tradition of putting the government before the individual. Think about all the ways this went wrong for the Soviet Union.