Yes, it’s still the economy

The economy defined 2010’s global events

It is easy to look back on 2010 and say that it will not soon be forgotten, that a year of oil and information leaks, Tea Party and sanity rallies, and cyber-warfare in Iran will leave indelible marks on the world.

We hope that we will remember the lessons of the year, and be less likely to repeat the same mistakes. In particular, we hope to identify the sources of the numerous disasters and near misses of the year — the Deepwater Horizon oil spill, the Chilean mine cave-in, the Haitan earthquake — and learn from them. It seems straightforward — history happened last year, and it’s hard to fight the logic behind “those who cannot remember the past are condemned to repeat it.”

It was equally easy to say those things about 2009. Or 2008. And so on.

In the punditry of the moment, what’s close to mind influences our decisions more than what happened years ago. Sometimes this is useful, as old information becomes stale, but more often it is merely a case of out of sight, out of mind. In our focus on what just happened, we miss the bigger picture: looking at how many buildings collapsed in Haiti instead of why those buildings were so vulnerable to the quake, for example.

The value in thinking about 2010, then, does not come from evaluating the myriad individual events and headlines of the year. Reasons of national pride aside, no one today cares who won the 2010 World Cup (Spain), or exactly how many Senate seats Republicans captured in the midyear elections (six). Instead, the value of 2010 comes from piecing together disparate events and identifying the common, persistent themes that explain not only why 2010 unfolded the way it did, but what will drive 2011 and beyond.

To pick the biggest of those themes was more obvious during this past year than most: the economy. While Congress can approve continuing resolutions all they want, no one disputes that the level of federal spending, ballooning in recent years to levels unheard of outside of world wars, represented one of the major issues of 2010. Health care reform, with its sweeping impact on 17 percent of the United States’ economy, cost more than a few politicians their comfortable seats. Obamacare’s increased entitlements, and the assorted tax policies that cover (not always fully) their expenses, will continue to drive public debate in this year.

But it’s not only when the animal spirits have turned sour that the economy comes into play. A nation’s economic health and freedom drives its status in the world, the welfare of its citizens, and its ability to respond to disasters. Haiti, the economic laggard of the western hemisphere, remains paralyzed more than a year after an earthquake knocked down a crumbling infrastructure and a corrupt market. Certainly rich nations aren’t immune from natural disasters — Europe struggled mightily after an Icelandic volcano spewed ash into commercial jetlanes — but the result was inconvenience, not fatalities.

Similarly, by embracing modern technology, Chile was able to miraculously rescue all of the trapped San José miners. One shudders to think of the outcome were those miners were trapped in a country like Iran; judging by the effectiveness of Stuxnet at wounding their nuclear centrifuges, it would be grim.

The lavish climate talks in Cancun accomplished little more than unfunded promises by wealthy nations to pay $100 billion a year to a Green Climate Fund, going to help poorer countries provide excuses for their lack of developmental prowess. China needs no such excuses for its increased power at the global table; their double digit growth rates are all the explanation needed.

Even those more inclined than your writer to support government welfare and quality of life programs don’t dispute how the economy shapes events — witness the riots in France and Britain over increases in the retirement age and the cap on tuition fees, respectively.

So what are the lessons we take away from 2010? President Obama hit on the basic idea in his State of the Union address, calling on us “to out-innovate, out-educate, and out-build the rest of the world.” He missed the fundamental reason for doing so, however. We don’t improve the economy to compete with the rest of the world for some fixed pie. We improve it to make the pie bigger, so that in 2011, perhaps we will have fewer nations or people that struggled as Haiti did in 2010.