Goldmark: How Australians see U.S.

Peter Goldmark, a former budget director of New York State and former publisher of the International Herald Tribune, headed the climate program at the Environmental Defense Fund.

The world looks very different, depending upon where you live.

I spent the third week of August in Australia. I go there several times a year because I serve on the board of a global company headquartered in Sydney, Australia's business capital.

The Australians live on a huge continent. It's the only country that occupies 100 percent of a separate continent. (I'm not counting Greenland, which isn't a continent and belongs to Denmark -- sort of.) But psychologically, Australians think like people in a small country. There are slightly over 22 million of them.

Australia conjures up pictures of huge, empty spaces with no people and lots of natural resources. Most of the population -- two-thirds, in fact -- is concentrated in five large metropolitan areas, making it one of the most highly urbanized nations in the world.

What does the world look like to Australians today?

It looks like it's turning upside down.

Historically, Australians have admired the United States. They've sent troops to every major military engagement we've been involved in, from World War II to Afghanistan. While many white Australians claim their heritage from Great Britain, their values and outlook have led them to make the United States the polestar of their foreign policy.

But now their faith in the United States is being shaken.

They watched in disbelief as the American president and Congress danced toward the D&D (debt-and-default) deadline in August. It looked from afar like the Mad Hatter's tea party: posturing; statements from the those on the Republican extreme right saying they were perfectly willing to see a default; and a last-minute agreement that just kicked the can sloppily down the road.

Some of my Australian friends said: "Wait a minute. That's the United States today? They're supposed to be the big guys who know what they're doing. Have they totally lost it?" An interesting question: Have we totally lost it?

Australia's economy is in pretty good shape. Its gross domestic product is about $1.8 trillion (the U.S. and Australian dollars are about equal right now), and total public debt is about one-fifth of that; in the United States, our debt is roughly equal to our GDP. Unemployment has been running about 5 percent, and Australia's budget deficit is only about 6 percent of its budget revenue this year (ours is about 50 percent). And the country has reserves of about $40 billion, almost all of it in U.S. dollars.

Which must be making them a little nervous right now.

The Australian economic situation is not without problems. But the country didn't register the severe financial shock we did in 2007 and 2008, when the housing bubble burst, Lehman Bros. collapsed, and banks needed bailouts. The Australians see themselves today has having a "two-tier" economy: The mining and natural resource sectors are booming; the rest, including the service sector, which constitutes about 70 percent of the overall economy, is limping.

When Australians look around today, they see Europe thrashing around like a wounded animal. And they see the United States riven by shrill ideological arguments and shakily uncertain about its path forward. Australia has been historically oriented toward the United Kingdom and the United States. But the steadiest power on its horizon right now is China, which consumes more of Australia's raw materials and exports than any other country -- and tries every day to find new ways to invest in Australian business.

It's always useful to know how your friends see you.

P.S.: A friend recently asked, why is your column full of so much gloom and doom? I said: I'll write about happy things when they're there to write about.