When competitiveness was last heard from, it was recessionary 1992, and Bill Clinton was hustling his way to the White House. The competitiveness debate was a tangled ball of string leading to other issues, like the belief that America was heading the way of the British Empire; that Japan, with its favorable balance of trade, was threatening; that an increasingly transactional Wall Street, featuring hostile M&A and leveraged buyouts, had turned CEOs into short-term punters. America no longer made stuff, which was bad. How can a Great Power not make things, like TV sets or BVDs? Japan subsequently crapped out, while American productivity, through luck, skill or deficit reduction, chugged off, and the argument about short-termism evaporated. Fast-forward. China, with its favorable balance of trade and most of our money, looms like a pulling guard on the horizon. Recession has receded, but there isn't much euphoria at this economic party. Wall Street is in even worse odor than 1992. Speculation! Greed! Short-termism! If anything, pressures on CEOs to manage by the quarter -- no, by the day! -- are even greater. Income inequality is high, the deficit is terrifying, and decline fills the air like the scent of illegally incinerated autumn leaves. Don't look at me, it's the deadbeat next door.

How, you may ask, can an argument that seemed so compelling in 1992, be forgotten in, say, 1995, then defibrillated to life in 2010? What does that say about a) our attention span, b) our mental acuity or c) the validity of the argument itself? Here's an obvious thought: Competitiveness makes a difference only when you believe you're losing. Competitiveness is thus a psychological state, a malaise, a melancholy condition in search of a cause. Competitiveness and its attached tin can, declinism, really afflict only those who have been winners. Given American exceptionalism, swollen by decades of good times (and pumped up by fumes of consumer credit, thanks in part to China) and by more than two centuries of self-congratulations, it doesn't take much to unhinge American patriots and make them fear, say, China, Europe, even Canada. Now you can argue, as many will, that competitiveness has been a chronic problem, masked by episodes of consumer hallucinations. But you could also say that we have had long periods of bliss punctuated by financial nightmares. Pick your reality.

Antiquarians will recall that in the last competitiveness crisis Wall Street was blamed for America's inevitable tech decline. The mechanism was simple. Wall Street forced short-term corporate types to slash R&D and plunge into short-term dealmaking. Eventually, we would run out of cool new stuff. Meanwhile, Japan was mastering artificial intelligence, the solar power of the day. While it was clear that by nearly every measure stocks were being traded more rapidly, the macroeconomic result was harder to quantify. (One result: Pay shot up for CEOs.) Shareholdings of many institutions were indexed, which made them long-term. But whether short-termism made a difference or not, what's clear is that everyone pretty much forgot about it when the economy righted itself. Tech boomed, with the Internet, wireless and iPods and iPads increasingly purchased with Chinese credit at low-money-down terms from overseas factories. And shareholder governance, which insisted it was the One True Way of getting corporate mojo back, increasingly imposed itself, reinforcing the quarter-by-quarter
mania. What did shareholders hate the most? Czar-like CEOs with long-term schemes.

There are many myths about competitiveness, including the notion that nations (we, China) are involved in cutthroat zero-sum struggles; competitiveness is one of the last refuges of mercantilism, followed by anti-immigrationism. It's considerably more complex than that, of course. Competitiveness and decline are to thought leaders what paranoia and apocalypse are to populists; sometimes, as with Brits and Romans, decline may actually occur, though timing is everything. Cicero thought Rome was definitely kaput, alas, four centuries too soon. Competitiveness, like paranoia, is as hazy and abstract as cloud computing or derivatives risk. In his recent memoirs, Felix Rohatyn bemoans the direction Wall Street took over his long career: the greed, the excesses, the transactional mania. Who can argue? But even as events are unfolding, Rohatyn struggles to pinpoint the origin of the malady. He admits to resisting reforms at the New York Stock Exchange in the '60s, which, when they did come, ushered in a new age of racy finance. Reforms were necessary; but what he leaves unsaid is how those changes then produced the crass ethos he dislikes, just as Clinton inadvertently nurtured our current mess in the belief that he was boosting competitiveness. Rohatyn is a great man, but his memoir leads one into a tangled thicket of long term versus short, relationships versus transactions and an imagined past even he once rejected.