08/29/2011 05:53 pm ET Updated Oct 29, 2011

Reinventing America -- From the Bottom Up

With Europe on the precipice economically and politically, and U.S. institutions experiencing a significant crisis of moral leadership in the wake of the debt ceiling debacle, any student of history can predict that the world is approaching an inflection point.

Into this period of enormous uncertainty (and leadership vacuum) steps Thomas L. Friedman, the three-time Pulitzer Prize winning New York Times columnist, with his latest book That Used to Be US: How America Fell Behind the World it Invented and How We Can Come Back.

Coauthored with Friedman's close personal friend, Michael Mandelbaum, who is a Professor of American Foreign Policy at the Johns Hopkins School of Advanced International Studies, the authors set out to diagnose and frame a national dialogue and a set of possible solutions about a way forward.

Although the book has two authors, it reads much like Friedman's other best-selling books, most recently The World is Flat, structured around a series of key arguments, themes, and insights and, of course, stories and memorable phrases.

The authors begin to lay out a major national problem by saying: "People have sort of gotten used to it." That is, they argue, Americans have developed a certain resignation that America's best days are behind it, while China's best days are ahead. We hear a range of voices illustrating the national malaise, ranging from teachers to former Pennsylvania Governor Ed Rendell, who declared, "We've become a nation of wusses," after the NFL postponed a Philadelphia Eagles football game due to snow. "The Chinese are kicking our butt at everything," Rendell went onto say, "If this was in China, do you think the Chinese would have called off the game?"

Herein lies a crux of the authors' literary foil, consistent with Friedman's NYT columns over the past several years: that the Chinese are somehow doing many things better than Americans these days (although the authors are careful to note much remains to be unfolded as China develops). Their main goal in highlighting the rise of China, which they state explicitly, is to create a sense of urgency for the reform movement that is so badly needed.

What's more, they say, in the post-Cold War era, America is experiencing an identity crisis of sorts without a visible competitor like the Soviet Union or a bold "man to the moon" aspiration to draw us together. They quote General Electric CEO Jeff Immelt as saying: "What we lack in the U.S. today is confidence that is generated by solving one big, hard problem -- together."

The authors insert China as the foil to create a sense of national urgency and applaud China's "willingness to search the world for the for the best practices, experiment with them, and then scale those that work is truly impressive." But, it's a straw man that feels underdeveloped, especially after we heard the same argument about Japan in the 1980s, and since China will have more than its share of problems as every developing nation always does. And, a large portion of the book, especially the later two-thirds, includes recycled material from Friedman's previous Times columns.

But that said, Friedman and Mandelbaum do a masterful job of framing some of America's greatest challenges, as well as the potential solutions. They're not afraid, for example, to call out what they believe is a "corrupt" two-party duopoly. That term itself should engender widespread national discussion and Friedman has become one of the leading national observers and commentators calling for an Independent presidential candidate to shake up the system. (With Starbucks CEO Howard Schultz's recent missive calling for an end to political campaign contributions from fellow corporate leaders also attracting enormous grassroots appeal, the authors' wish may not be far off.)

Another theme the authors skillfully hammer upon is the problems associated with an era top-down policy-making, such as No Child Left Behind. In an era of globalization and the IT revolution, change increasingly rewards bottom-up innovation and the capacity for adaptation. One particularly good example for why a different way of thinking and approaching problems is needed comes from Friedman's discussions with Byron Auguste, a managing director with McKinsey & Company.

Auguste and McKinsey researchers have found that American companies are not rehiring people coming out of the past two recessions like they had during previous recoveries. So, companies will routinely lay off 30 to 40 percent of their workforce during recessions, and then rehire workers once demand returned again. Yet in the recession of 1998, companies were able to make up for roughly 98 percent of their lost revenue with automation and outsourcing, rather than hiring workers back. As Auguste puts it, "When demand comes back, firms won't hire back as many workers [as in the past], because they have now fundamentally restructured their operations to do their business with fewer people."

This is a crucial insight, emblematic of many points the authors make. The world has fundamentally changed, and we can no longer look to the past to predict what will get us out of the current crises. We must invent new assumptions and solutions at a time when American institutions are also in dire need of renewal and reinvention.

This book should elicit a significant national response, and an outcry even, from the American people who understand that moments like these in history demand action and leadership.

Ultimately, Friedman and Mandelbaum declare their core argument and point of view:

"Our problem is us -- what we are doing, how our political system is functioning and not functioning, which values we are and are not living by. And our solution is us -- the people, the society, and the government that we used to be, and can be again. That is why this book is meant as both a wake-up call and a pep talk -- unstinting in its critique of where we are and unwavering in its optimism about what we can be if we act together."

After all, while the term "American exceptionalism" reeks of the very arrogance and paternalism that our founders rebelled against, America's culture of entrepreneurship is unique and should give us all great optimism about the future. Young Americans may face enormous difficulties getting jobs out of college, while saddled with enormous debt burdens, yet many of them are inventing their own jobs, building beneficial personal and professional ecosystems on Facebook and Twitter, and are as socially minded a generation as the country has ever seen.

If you need proof, just go to Detroit. The city that was American industrial death is undergoing a Renaissance, propelled by precisely the type of entrepreneurial leadership the country is desperate for. What's more, the young business people, designers, artists, and social entrepreneurs having fun, in stark contrast to many of those who've endured this long, hot Washington DC summer. And, oh yeah, the musician Eminem is singing the soundtrack to that reinvention. Out of the ashes, Detroit is rising as the most important example of American renewal in decades.

That resilience, energy, and, yes, entrepreneurial leadership stands the chance to do what the established generation of elected and positional "leaders" has failed to do -- to reinvent and reignite the twin American ideals of self-renewal and service to a cause larger than oneself. And that is precisely what Friedman and Mandelbaum hope to achieve.

Buckle up, America. This revolution will be improvised. And, it's all coming to the forefront of our national consciousness soon, thanks at least in part to That Used to Be Us, a very important and timely book.

(Note: A good summary of the ideas in the book can be found in an interview that Friedman did with Aspen Institute CEO Walter Isaacson at the Aspen Ideas Festival in June.)

Peter Sims is the author of Little Bets: How Breakthrough Ideas Emerge from Small Discoveries and is a Co-Founder and Director of Fuse Corps, an innovative social venture a social venture that will enable America's most entrepreneurial young leaders to work on year-long grassroots projects to tackle some of society's most pressing problems.