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Commentary: This time, will the dragon win?

This article first appeared in the St. Louis Beacon, Jan. 25, 2011 - Most of us have seen cheap sci-fi movies where the wounded prehistoric dragon from outer space thrashes about, making strange noises and, depending on the scene, smashing a building or two before finally and fully dying.

Organizations are often like that dragon. Think last days of Enron, the evaporation of American automakers' dominance, St. Louis' own decline as a pre-eminent American city and headquarters to global companies.

Organizations (and our fractured nation's economy is one of sorts) do not die easily, elegantly or well. With the fast and increasingly furious pace of change of our economy, both local and national, the sounds may be loud and the thrashing great, but it does not take a dramaturge to see where this story is headed.

Am I being too glib? After all, the United States sill leads in technological innovation and has robust financial institutions. We are the envy of many. Nations send us their best and brightest to educate. We are STILL the largest economy in the world.

Yes, but ... In the great drama that is the global economy, we are looking more and more if not doomed, then at least wounded.

That brings me to China. In a recent article, "China's Great Game," the Financial Times preferred the panda as a symbol for China's unfolding economic agenda, as opposed the oft-used tiger. Yet, the recent visits of China's President Hu Jintao to the U.S. and of Vice Premier Li Keqiang to Europe show that the old image of a dragon may be best. China has more than arrived; and as those of us who want to slay or at least slow down the dragon, this movie is not turning out the way we thought.

In what may be an apocryphal business-school story, buggy whip manufacturers are said to have gone wild when sales dropped as cars started taking over the roads. Innovation, cost cutting, hand wringing and even protectionist legislation came roaring out from the not-to-be-defeated buggy whip industry; yet there was little impact. The car won; and most buggies and the demand for whips went away.

Switching from buggies back to that sci-fi movie, this film has a modern dragon, while the weapons being used it are prehistoric.

At a conference some years ago, a Wharton School faculty member, as American as American can be (Bronx accent, Yankees fan, Army Veteran) observed that "in the future business would be done in English and thought in Chinese."

Think about that as you listen to pundits on the right and left talking about the recent Chinese travels: The story's told as though Hu and Li had been summoned to the principal's office for a good stern talking to and then sent home to get the rest of their colleagues straightened up. But what we are really seeing is how dramatically things have changed.

As the dragon has become the main character in the story, we are becoming supporting players; signaling continued shifts and fundamental change. Our way of understanding global ethics, governance, human rights, fair trade and currency valuation are how the conversation is being spoken, but not how the conversation is being thought. The Chinese are buying bonds in Europe to rescue the Euro. And human rights, fair trade and revaluing the Renminbi may have been topics between Presidents Obama and Hu met, but they were mere subplot touches, not the man plot-line.

For all of this emerging change, though, I am grateful. Don't get me wrong. I am not exactly enjoying watching the rise of the dragon. China is in no way the Edenic realization of the perfect society. The poor and even the middle class face whatever whiplash the Communist Party's newest initiative causes. Still, as a member of our sinking middle class, I cannot say our own way is working out so well, and I fear that those of us who still think of ourselves as middle class may be populating a new demographic, FMC, formerly middle class. The poor continue to lose ground. For both the FMC and the poor, the safety net continues to fray.

Our economy's recent implosion and our blind devotion to policies that plunge more people into poverty and shrink the number of basic service provided for our most vulnerable citizens make the claims of economic superiority seem like some kind of insider's joke for only the wealthy. Our continued decline has taken a terrible toll on too many people I know and has not left me in great shape either. Real people are upset by the disequilibrium and decline that marks our market based capitalism. China may be a partner in our dance, but they are not the primary culprits in the jury rigging of the system that is wiping out the middle class.

As Elizabeth Warren of the Harvard Law School and author of "The Two Income Trap" argued in her Jefferson Lecture at UC Berkeley, the middle class continues to lose ground even as the financial requirements for living the middle class life have increased. As the housing and credit-card bubbles show, predatory lending on steroids coupled with the starving of basic social services through neoconservative changes in tax policy have placed the middle class families in a kind of double jeopardy.

Chose to limit your debt load and you lose out on the basic promises of middle class life; good schools, basic health care and safe neighborhoods. Borrow with the hope that your earnings will sometime soon catch up with your expenses and you are where most of the middle class is, in the soup when there is any slowdown. Either way you may now be now losing your place in the middle class and facing the possibility of bankruptcy or foreclosure.

The Chinese have certainly influenced our economy by selling goods and services made cheaper by their economic policies. Still, they were not the ones who rewired our government and economy to create the current situation that is so hostile to the middle class in the ways Warren chronicles so well.

The massive change we are experiencing may be inevitable but they are not always good. Still, when these larger shifts occur, there simply is no stopping them.

So, maybe like the last folks to unclench their hands from the fine, firm handle of the buggy whip, we are simply going to have to learn some new ways to travel. It is not clear what these ways will be. I am guessing the dragon will have the lead role. And I am hoping that in this emerging tale, it is not the American middle class that is breathing its last breath.

Steve Lawler is an Episcopal priest and professor.