The US economy is facing one of the most challenging periods in its history. It is dealing with a huge deficit, in excess of $10 trillion, the heavy cost of wars in Iraq and Afghanistan, an ongoing banking and credit crisis, a $700 billion rescue plan, a stimulus plan by President-Elect Barack Obama, who has promised to allocate resources estimated at $1 trillion, and a rescue plan for the car industry, which will be fateful for three million workers. The US is also coping with low consumer confidence and burgeoning unemployment.
The crisis is not confined to the Stars and Stripes, but is global in scope, affecting many countries, including China, India, and Russia.
On the eve of Obama's inauguration on January 20, it is possible to point to strategic directions, or at least trends, in domestic and foreign policy that are reflected both by the manning of key positions in the administration and by Obama's own preferences in his stimulus plan and priorities.
At the celebrations to mark Israel's 60th anniversary organized by the America Israel Chambers of Commerce and Industry in November, Carlyle Group CEO David Rubenstein described the four transitions that the US was dealing with to the hundreds of participants.
The first is the transition from steady growth to deep recession. The second is the transition from generous leveraged credit to a freeze in the granting of any credit at all. The third is the transition from the Bush administration of the past eight years to the Obama administration with its different characteristics. The fourth is the transition from clear and dominant US global leadership to a US that, after it emerges from the crisis, will be a great power among other great powers. It will be a great power, but not the sole leader.
The significance of this transition is deep. Even if not everyone agrees that this transition will occur upon the emergence from the present crisis, when the world emerges from the crisis, it will be a more integrated world than before. We will fall together, but we will rise even more united.
Under these challenging circumstances, the power of American society comes into play, with all its virtues and capabilities, its national founding values, which have made it what it is. Many hopes are being placed with the new administration, which will set challenges for the American nation and will guide it down the new road.
Beyond fixing the financial system and changing the nature of business management, emergence from the crisis must also be based on thorough renewal of global industry and global management and coordination between continents, countries, and markets. The faster that the US returns to lead innovation, science, and technology, as well as the new industries, the faster it will emerge from the crisis to create a growing economy and jobs.
Renewable energy production, one of Obama's visions, will eliminate the US's dependence on foreign oil within a decade. The renewal of the car industry and the changeover to next-generation electric and hybrid cars travelling on smart roads with digital networks, the vision of Shai Agassi, will be an economic and technological spearhead.
The energetic entry into nanotechnology, begun by President Bill Clinton in 2000, the development of biotechnology, and investment in next-generation industries will help harness information technologies and computerization to create resources, such as water, and manage the industries of tomorrow.
Against this background, more than ever, and precisely at a time of a global economy where it is possible to turn to other markets, Israel should join hands with the economy and innovation of the US, upgrade its relationship from something taken for granted to a strategic level, more than ever before. It is necessary to link Palo Alto with Herzliya, and for all enterprises whose core activity is US-Israeli to come together. We must develop deep, proactive, and coordinated collaborative ventures in order to run together. The US's emergence from the crisis could help Israel ride the wave of future growth.
The America Israel Chambers of Commerce and Industry plans to facilitate and promote this joint effort by arranging more meetings between US and Israeli industrialists and policy-makers to continue the renewing partnership.
Nechemia (Chemi) Peres is chairman of the America Israel Chambers of Commerce and Industry and a managing partner at Pitango Venture Capital
Published by Globes [online], Israel business news - www.globes-online.com - on December 29, 2008
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